Bank OakNorth has agreed to fund developer and real estate fund manager Frogmore's acquisition of a development site in London. The company will use OakNorth's $18.6-million loan to develop a new 275-guestroom hotel in Southwark.
The group has plans to counteract the shortage in hotel room supply in Southwark that it has experienced for several years. Now, that there is a demand for living and traveling to this borough of London, Frogmore aims to take advantage of the predicted returns on investment in the area.
“In Kensington and Chelsea, there are three times as many hotel rooms, [and] in Westminster, there are more than seven times," Jo Allen, CE of Frogmore, said in a statement.
“Southwark’s regeneration in recent years has put this south London borough on the map and made it a prime location for homes, international tourism and business,” Ben Barbanel, head of debt finance and Damien Hughes, property finance director at OakNorth Bank, said in a statement.
It recently sold its latest development, the five-star South Place Hotel, to Chinese investors earlier this year. In early April, Frogmore reportedly sold the 80-room hotel to Hong Kong-based Tian An China Investments for over $86.5 million. Not only is it the first hotel from restaurant company D&D London, but also it is highly touted for its location between the Square Mile financial district and the hip East End. D&D London continues to operate the hotel under the new ownership.