Malmaison York hotel set for investment after owner secures £18m finance package
The Malmaison York hotel is set for investment after property firm Firethorn Trust announced that it had secured a £18m debt package with Grosvenor.
Firethorne said the financing will support its investment in the luxury Malmaison York hotel, which it acquired earlier this year.
Richard Whitby, chief financial officer of Firethorn Trust, said: “The confidence that Grosvenor has shown in this asset underscores its strong investment potential, bolstered by a long-term lease with a premier hotelier in an exceptional location.
“At Firethorn, we have a strong track record of making strategic acquisitions that deliver attractive and secure returns, and Malmaison York is a valuable addition to our portfolio. We are delighted to collaborate with Grosvenor on this investment.
“This financing demonstrates Firethorn’s strength as a sponsor and our ability to secure favourable financing options, in today’s dynamic real estate market.”
Firethorn Trust acquired the Malmaison York in June of this year.
Though the price of the hotel was not disclosed, Lothbury listed Malmaison as one of its top ten assets a month prior to the sale, valued at £31m based on figures from March 31 this year.
The hotel was previously known as the Yorkshire House building, and had been used as offices by insurance giant Aviva.
The site is occupied by Malmaison under a 35-year lease, with a rental income of £2.1m per annum, as of June.
Speaking at the time of the purchase, Marcus Weeks, director and head of living at Firethorn Trust, said: “Malmaison York is a high-quality asset that will perform well and create long-term value for us, whilst strengthening Firethorn’s presence in the living space.
“It’s a fantastic addition to our investment portfolio and complements our wider development strategy to deliver high-quality spaces in great locations that enable people and places to thrive.
“We have an appetite and ability to pursue opportunistic transactions, and look forward to continuing our growth within the living sector.”
The site, which is currently one of the best performers within the Malmaison and Hotel Du Vin group, features 150 luxury guest rooms, a rooftop sky bar with panoramic views across the city, ‘Work + Play’ facilities and an on-site spa and gym.
The site is the first hotel to sit within Firethorn Living’s portfolio, which consists of two purpose-built student accommodation (PBSA) developments and a central London office-to-residential conversion.
Steph Ball, investment director at Grosvenor, said: “This transaction ticks a lot of boxes for us. We saw an opportunity to finance a high-quality asset, with a strong operator, and were able to adapt our strategy to do our first investment loan.
"This helps to diversify our existing ‘residential development’ portfolio, and we’re pleased to be working with a fantastic new partner with ambitious growth plans.”
Firethorn Trust was advised by JLL and Maples Teesdale. Grosvenor was advised by CBRE Lending and Freeths.