CBRE IM to fund 188-bedroom Salford hotel
Construction of RJR Securities’ Chapel Street scheme is due to begin next month after the investor agreed to back the £30m project.
The developer and CBRE Investment Management have struck a forward funding deal for the 188-bedroom hotel, to be operated by Dalata Hotel Group under its Maldron brand.
The deal represents a yield of 4.36%, according to CBRE.
“Despite the obvious challenges that the hospitality sector has faced due to Covid, we are witnessing a selected return of investor appetite for the sector,” said Will Kennon, executive director for CBRE.
“This project attracted strong fund interest owing to the combination of undoubted location, indexed lease to the strong financial covenant of Dalata and the first-class project delivery team.”
Dalata signed a 35-year lease on the hotel after RJR bought the plot from Telereal Trillium.
The scheme is located just outside Manchester city centre, close to the burgeoning Greengate neighbourhood.
McAleer & Rushe has been appointed to build the 17-storey project, designed by architecture firm NORR.
Richard Peskin, chairman and majority shareholder of RJR Securities, said: “Over two years ago we identified this site, being close to Manchester’s luxury and prime leisure core, as an ideal location for a hotel.
“Now, with the secure forward funding provided by CBRE Investment Management, we are able to fulfil our ambitions.”
CBRE acted as funding advisor for RJR Securities, with Gleeds as development manager and Squire Patten Boggs providing legal advice.
Avison Young represented CBRE Investment Management.