Funding deal agreed for £62.7m hotel

A funding deal has been agreed to bring forward a £62.7m hotel on a prominent site adjacent to the railway station in Leeds city centre.Marrico Asset Management and Helios Real Estate have signed a forward funding deal with UK Commercial Property REIT Ltd to build a 305-bed hotel to be operated by Interstate Group under the Hyatt brand.The £62.7m hotel will be developed by the partnership on their Sovereign Square site in the city centre adjacent to the railway station.Richard Bland, of Marrico, said: “The acquisition is in line with UKCM’s strategy to take exposure to operational real estate sectors that are expected to deliver resilient rental incomes. The hotel will be operated under a lease by Interstate Hotels, a leading international hotel operator, with UKCM’s rental income based on the income generated from the operation of the hotel.”Mark Barnes at Marrico confirmed construction will begin immediately.The 12-storey hotel is scheduled to complete in 2024, with a 25-year franchise agreement in place with Hyatt Hotels.The 305 rooms will be split between the short stay Hyatt Place and the long stay Hyatt House brands. The premium hotel will provide meeting rooms, a gym and several food and beverage options, including a rooftop bar.Trevor Cartner, of Helios, added: “This is the last available site at Sovereign Square and we have commissioned a suitably impressive building to complete the development. The hotel will be a fantastic addition to the Leeds market which we believe will continue to grow. Our investment will sit alongside UKCM’s for the medium term so the hotels success will determine ours.”Planning permission for the hotel was granted last year (2021).DLA Architects have designed the building and RBA will be project manager. BNP Paribas acted for Marrico and Helios in the sale. Square One Law acted as adviser and legal representative.Law firm Addleshaw Goddard advised funder UK Commercial Property REIT on the deal. Lucy Sturrock led the property team supported by Hayley Maxwell and Katie Millner on construction.