UK fund plans to turn a Westminster office into a hotel

Photo courtesy of Gettys

UK-based M&G Investments has purchased a former London office building to turn into a hotel for its for its £3.3-billion long-lease M&G Secured Property Income Fund. The fund will support the development of a 339-guestroom hub by Premier Inn in Westminster at 21 Tothill Street. The property, which is expected to open by the end of the year, will be rented to Premier Inn on a 25-year lease with five-yearly rent reviews.

The transaction complements the Fund’s existing portfolio of Whitbread Group assets, which includes Premier Inn hotels at Gatwick North Terminal, Red Lion Street, Holborn, and Wandsworth in south west London. 

“This investment will provide our clients with a high quality, inflation-linked cash flow,” Ben Jones, manager of the fund, said, adding that the location of the hotel will help improve its ROI. 

FREE DAILY NEWSLETTER

Like this story? Subscribe to IHIF!

The hospitality industry turns to IHIF International Hotel Investment News as the must-read source for investment and development coverage worldwide. Sign up today to get inside the deal with the latest transactions, openings, financing, and more delivered to your inbox and read on the go.

Pension funds and insurance companies, Jones said, are looking for secure long-term investments to match their liabilities.

Premier Inn is looking to have 85,000 guestrooms open by 2020.

Suggested Articles

GSD Group acquired the rights to build video game-themed Atari Hotels in the United States, with the first to break ground in Phoenix.

The new Arbor prototype is meant to minimize costs while incorporating natural elements.

As well as acquiring a stake in the company, The Silverstone Cos. has also gained exclusive rights to development in Asia.