Deansgate Securities, a joint venture between Ask Developments and Realty Estates, has agreed pre-let terms with hotelier Travelodge for a 200 bedroom hotel on the 7.4-acre former Boddingtons Brewery in Manchester.
Travelodge has agreed to take a 35 year lease, which is the first pre-let and pre-sale deal for the developer.
Deansgate Securities has also sold the site being occupied by the 75,000 sq ft Travelodge to Marcus Worthington Properties, which will construct the hotel.
Alan Burke, of Deansgate Securities, said: "We are delighted to have agreed terms with Travelodge, our first tenant, on the former Boddingtons Brewery site. This decision has been taken while the economy is still fragile and the property market remains subdued. It reflects a massive vote of confidence in the site, which is a stone's throw from the highly successful MEN Arena and Manchester's primary shopping area, the Arndale Centre.
"We are also delighted to announce today that we have agreed terms with Marcus Worthington Properties to forward purchase the investment and undertake the construction work. Our forward sale deal with MWPL reflects both parties willingness to think outside the box in a difficult funding marketplace".
Russ Worthington, director of Marcus Worthington Properties, added: "Because we are both developer and contractor we can aggressively compete with others in the market and act as a catalyst for development, facilitating deals like this one with Deansgate Securities.
"MWPL are delighted to be working with DSL and this is the third hotel deal we have done in the last six months which will further enhance our commercial development portfolio. We have been active throughout this turbulent period and are continually in search of similar opportunities."
The developer expects to submit a detailed planning application for the scheme by the end of February and be on site in July 2010. It is anticipated that the hotel will open for business in June 2011.
Ask and Realty Estates acquired the site in 2006 with funding from HSBC. Architects are HKR in Manchester.
Travelodge now operates 380 hotels in Ireland, Spain and the UK. The company has ambitions to expand, with plans to operate 70,000 rooms by 2020 and to be the biggest hotel operator in London by the time of the 2012 Olympics.