The Oaknorth loan will be used to acquire office space at 53-59 Chandos Place and convert it into the hotel which will open in Q4 2019.
The hotel will have a café available to hotel guests and will be within a stone’s throw of several tourism hotspots, including: Leicester Square, Trafalgar Square, the National Gallery, Covent Garden, the West End, and the Strand.
Jonathan Raymond, director at Z Hotels, said: “Over the years, our customer base has continued to grow and we now have hundreds of clients who stay with us several times throughout the year. Business travellers and holiday makers alike are attracted by our competitive prices, sizeable rooms and central locations – this new hotel in Trafalgar Square will be a prime example of all three.
“We chose OakNorth for this transaction as we knew they’d be able to deliver what we need in the time frame we needed it. With further growth targeted over the next few years, we expect to be working with the OakNorth team again in the future.”
Deepesh Thakrar, senior director, debt finance at OakNorth, added: “UK hotels have enjoyed record trading this year, underpinned by the increase in overseas leisure travel, two royal weddings, and the value of the pound being at its lowest rate against the dollar in three decades. Z Hotels with its convenient and incredibly central locations, affordable prices, and high quality, has been in a prime position to take advantage of this boom.
“The group achieves much higher occupancy rates and margins than its peers and has proven that it can maintain this across an increasingly expanding portfolio. We’re delighted to have supported them with the finance to develop their Trafalgar Square site and look forward to working with them in the future.”