Lothbury IM to fund €50m York hotel project

Lothbury Investment Management, acting on behalf of Lothbury Property Trust, has announced plans to fund the development of a new Malmaison boutique hotel in York.

The project involves the redevelopment of a 1960s landmark building previously known as Yorkshire House. The hotel will comprise 150 bedrooms and a new rooftop ‘sky bar’ providing views over York.

Once completed, the scheme will have a development value of €50 mln (£44 mln), reflecting a net initial yield of 4.54%. Malmaison has agreed to a 35-year lease with RPI-linked rent reviews every five years, between 0% and 4%.

Mark O’Mullane from Lothbury Investment Management, said: 'This is a major investment which provides almost-certain rental growth in line with inflation. It also increases Lothbury Property Trust’s exposure to the hotel sector, which fulfils a longstanding objective to acquire another hotel asset to complement our existing Edinburgh hotel. It also improves the average weighted unexpired lease term of the Fund.'

Development is commencing in the spring, with completion scheduled for Q2/Q3 2019.

Yorkshire Ventures will act as development manager.


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