The 620-room hotel and aparthotel complex is expected to open by 2021.
Asset managers M&G has acquired the long leasehold interest of the development site and will finance the construction of the hotel complex to be carried out by development consortium, Concierge 3 Limited (a joint venture partnership between The Pickstock Group, Staycity and BSW Land & Property Ltd).
Whitbread, the owner of Premier Inn and Staycity will each take 30-year leases on five yearly inflation-linked rent reviews, operating independently with 60% and 40% of the rooms respectively.
Staycity, will provide the aparthotel side of the development under its premium brand Wilde Aparthotels by Staycity. Whitbread will provide a latest generation 373-bedroom Premier Inn hotel, which will be its first in Paddington.
Jonathan Langdon, acquisition manager Central London for Whitbread, said: “We’ve been exploring opportunities to invest in Paddington for some time now and are very excited at the prospect of gaining a presence for Premier Inn there. It’s a fantastic development in one of London’s most vibrant and well-connected areas and the hotel adds another quality zone-one location to our growing London portfolio.
“The new Premier Inn will make a positive contribution to the area by offering visitors greater choice, creating local jobs and spreading the positive knock-on benefits to local businesses that Premier Inn hotels bring.”
Tom Walsh, CEO and co-founder of Dublin-based Staycity, added: “We are delighted to be part of this exciting development opportunity. Paddington Station is London’s gateway to the West and is just 15 minutes from Heathrow Airport. As well as being a burgeoning business area, leisure visitors can enjoy two royal parks within walking distance, the picturesque Little Venice and great links to London’s Notting Hill and the West End.
This is M&G’s fifth transaction with Whitbread as a tenant, following a £100m funding deal to develop a 339-room hub by Premier Inn hotel on Tothill Street, Westminster, adding to the existing portfolio of Premier Inn hotels at Gatwick Airport North Terminal, Holborn and Wandsworth.