A finance deal has been finalised to fund the development of a new hotel complex in Birmingham city centre.
Developer Nikal has agreed the funding package for part of phase two of Exchange Square which will see the construction of a 15-storey Premier Inn hotel with 235 bedrooms.
There will also be a 6,000 sq ft Bar + Block Steakhouse restaurant, 5,000 sq ft of retail units and a new half-an-acre public square, with 90 new jobs set to be created.
The funding has been agreed with a client of LaSalle Investment Management. Although terms have not been disclosed, the second phase of Exchange Square has a development value of £120 million.
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A 37-storey apartment block containing 375 units to rent is also being developed at the site in The Priory Queensway to complete phase two.
Earlier this year, Nikal signed contracts with Grainger, the listed residential landlord and private rented sector specialist, for the funding and delivery of the tower after first announcing a £77 million deal in 2018.
Construction staff are already on site doing groundworks and the overall project is due to be completed in summer 2022.
It will occupy a prime city centre location due to its proximity to Moor Street and New Street stations as well as overlooking HS2 in Curzon Street when it completes.
Richard Fee, chairman of Manchester-based Nikal, said: “This is a market leading and market defining deal, all done during the covid pandemic. The local area is getting ready for the arrival of HS2.
“It is clear that LaSalle Investment Management share our vision for this area of Birmingham and we are delighted to be working with them again.
“This transaction shows the resilience, pragmatism and professionalism within the UK property industry at its best.”
Julian Taylor, head of long income at LaSalle Investment Management, added: “We’re pleased to have completed this acquisition as we continue to target high-quality investments offering long-term, inflation-linked income streams to meet demand from clients with liability-matching investment strategies.”
The £105 million first phase of Exchange Square was also forward-funded by a client of LaSalle Investment Management.
Known as Allegro, it comprises 603 rental apartments in three buildings of seven, 14 and 27 storeys and is supported by 27,500 sq ft of retail and leisure accommodation.
Advisers on the deal were Colliers, Bampton Satchwell and Eversheds.