A £27 million refinance deal has been completed to help fund the development costs of Birmingham’s only five-star hotel.
Leumi UK bank has agreed the five-year loan facility with private investment firm Starwood Capital to finance the opening and stabilisation costs of the Grand Hotel, in Colmore Row.
The grade II*-listed building was acquired in 2017 by funds managed and controlled by Starwood Capital.
Now the 185-bedroom venue – which recently benefited from a £45 million renovation project – will undergo a grand reopening in May this year.
This includes the launch of its new cocktail bar Madeleine and the opening of New York-style brasserie, Isaac’s, which is located on Barwick Street.
Stephen Welch, senior relationship manager for hotel finance at Leumi UK, said: “We are thrilled to be working with Starwood Capital in helping bring one of Birmingham’s most iconic buildings back to life to create a luxury hotel for Birmingham in the 21st century.
“The fact we have been able to secure such a high profile new-to-bank client while we are still under lockdown is a real testament to the strength and hard work of our hotel finance team.
“While Covid-19 has caused temporary disruption to the hotel market, we remain confident in the long-term demand for high quality accommodation in city centre locations.”
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Grand Hotel closed its doors in 2002 and a project to restore and reopen the venue has been going on for more than a decade.
The latest deal marks Leumi UK’s first transaction involving funds managed and controlled by Starwood Capital.
In recent months, Leumi UK has provided over £135 million in new hotel financing, with transactions including providing development finance for Manex Properties Ltd’s new Amano Hotel in Covent Garden and refinancing for Crimson Hotels’ investment in the 100 Queen’s Gate Hotel London.