Shiva Hotels Group has secured a €252.8m (£230m) development financing package from Cale Street Investments and Crosstree Real Estate Partners, to fund the construction, through to completion, of its 199-key luxury lifestyle hotel in Marylebone, London. Agreed during the COVID-19 pandemic, the transaction represents one of the largest recent development facilities for a Central London hotel.
Cale Street is providing €175.9m (£160m) and Crosstree €76.9m (£70m) of the initial four-year facility, which has an option to extend and refinances an €87.9m (£80m) loan that was in place with ICG Longbow. It represents the Group’s first transaction with Cale Street and Crosstree, both of which have extensive experience financing complex hotel projects of this type.
John F Hunt, the construction specialist, has been appointed to undertake demolition site groundworks as well as the initial substructure and frame construction works, with the main contractor to be appointed early next year. The first guests are due to be welcomed in early 2023.
Rishi Sachdev, Managing Director of Shiva Hotels, commented: “This is a major milestone for our Marylebone Lane development, and brings the delivery of what we believe will be one of London’s most iconic hotels one step closer. Cale Street and Crosstree are both hugely experienced and highly selective real estate financiers and bring a deep understanding of the UK hospitality sector. Securing this package, particularly in the current economic climate, is a further endorsement of our vision to create an unrivalled luxury lifestyle hotel brand and we are extremely excited to be partnering with both parties. This is a challenging time for everyone involved in the hospitality sector and our near-term focus continues to be on working closely with all our stakeholders to navigate through this period of uncertainty. Longer-term, however, we are steadfast in our conviction that the global appeal of London will continue and that this will translate into strong demand for our carefully curated hotels in highly desirable locations.”
Peter Robinson, a Partner at Crosstree, said: “Given the current dislocation in real estate financing markets for projects of this type, Crosstree together with Cale Street are pleased to be working with Shiva in taking forward this prime hotel development. While no doubt we are currently in a challenging period for the hospitality industry, we share a longer-term vision of the resilience of London and high-quality real estate and locations such as this.”