Aparthotel brand Staycity is to open a new site in London’s Paddington as part of a £203m project in partnership with Premier Inn.
A new 620-bedroom hotel and aparthotel will open in 2021, with 60% of the building occupied by Staycity’s Wilde brand and the other 40% taken over by Premier Inn.
M&G acquired the long leasehold interest of the development site and will finance the construction of the new hotel.
Under the terms of the deal, Whitbread plc, the owner of Premier Inn and Staycity will each take 30-year leases on five yearly inflation-linked rent reviews.
The scheme also has provision for a 27,000 sq ft education facility, landscaping and open space.
The property will mark Premier Inn’s first hotel in Paddington.
Kevin Vickers, Investment Director, M&G Real Estate, says: “Business travellers continue to seek well-connected and affordable central London accommodation. The £2 billion invested in Paddington in recent years has predominantly been invested in office and residential developments, positioning this hotel and aparthotel transaction as an attractive investment opportunity.
“London is one of Europe’s best performing hotel markets and is expected to account for more than a third of the pipeline of new aparthotels in the UK and Ireland market by 2021. The increase of high-profile operators entering the market and the availability of operating data is enabling investors to become more comfortable with investing into the sector.”