Situated on Whitechapel Road, the nine-storey property will become the flagship hotel for the joint ventures’ extended-stay hotel concept, Urban Villa. A design team of New York-based architects Grzywinski & Pons and hotel specialist Dexter Moren Associates have been appointed to develop the hotel, which is expected to open next year.
“Urban Villa has two distinct design-led identities: edgy Manhattan loft-style common areas and spacious four-star luxury hotel rooms,” said Union Hanover’s director Andrew Fowler.
Offering flexible hotel rooms with self-catering facilities, extended-stay is one of the fastest sectors of growth in the US and Asian hotel markets. The hotels are attractive to corporate residents during the week and leisure guests at weekends and the hybrid of ‘serviced apartment’ and ‘hotel’ tends to have lower overheads and longer occupancy for the operator, thus delivering higher margins.
The developers are currently seeking an operator for the restaurant and have been exploring various options including some preliminary discussions with New York-based chefs.
Eric Jafari of BridgePoint Ventures, which is providing equity for the development, said: “We believe that this project will have a significant impact on lifting the area and helping it maintain its character and edge.”
Topland Group, headed by Sol Zakay provided the senior debt for the £16m acquisition. The details of the deal were not disclosed but it is understood that Topland provided the loan on a 76 per cent loan-to-value basis, while BridgePoint Ventures and EquityBridge Asset Management arranged the balance of the required funding.
Andrew Southern, chief executive officer of Southern Grove, added: “We were very pleased with what Topland offered, not just the higher gearing. They instantly got our business model and were fast and responsive to our needs. They delivered.”
Earlier this summer, BigHospitality reported on another of Union Hanover Securities’ projects. Starboard Atlantic Hotels, a joint venture between Starboard Hotels and Union Hanover Securities, purchased land on the site of the former London 2012 Olympic Park to build an 18-storey hotel complex which is also set to fall under the aUrban Villa aparthotel brand.
Speaking then, Jafari from Bridgepoint Ventures said: "There is a clear supply gap in branded extended stay hotels in cities across the UK and I believe that Urban Villa is the most suitable product to fill this gap. With five key city centre sites secured so far and over 950 units in development, Urban Villa is positioned to become the extended stay market leader within the next five years.”