OakNorth stumps up £15.7m to fund Ancoats hotel

To be operated under Hilton’s Motto brand, consent was secured from Manchester City Council in 2023 for a 154-key hotel by a consortium of Dean Street Developments, Definition Capital and Assured CMS.

The Motto brand is Hilton’s insignia “designed for the modern, urban traveller seeking flexible, connected spaces in city-centre locations”. They typically feature a bar, café and  co-working area.

To be developed at the junction of Laystall Street and Great Ancoats Street, the new-build hotel will be built up to 20 storeys, with two basement levels in addition.

OakNorth’s support will enable the development of one of the first Motto hotels to open in the UK, as Hilton expands the brand’s international footprint.

The £15.7m facility provided by OakNorth will fully fund development and finance costs over a 25-month construction period, before converting into a trading facility for the hotel’s operational phase.

Designed by SimpsonHaugh with Deloitte advising on planning, consent was granted in May 2023.

Construction is expected to start later this year with practical completion anticipated by Q3 2026.

The project is being spearheaded by Adi Hodzic of Dean Street Developments, alongside Jeff Britnell of Assured CMS.

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Development manager Hodzic said: “The Hilton Motto brand is a great fit for Manchester’s vibrant and evolving cityscape. With OakNorth’s support, we’re confident in delivering a best-in-class hospitality experience that speaks to the next generation of travellers.

“It’s incredibly rare to find a funding partner that not only understands the nuances of hotel development but is also willing and able to provide a facility that covers 100% of the development and finance costs, and then flexibly converts into a trading loan. OakNorth is one of the few banks out there that can structure deals like this making it the ideal banking partner for our business.”

Deepesh Thakrar, senior director of debt finance at OakNorth, said: “This deal exemplifies our commitment to backing high-quality, forward-looking hospitality developments in prime UK locations, as well as our ability to provide umbrella facilities, where we’re able to support the business in the buy, build, and stabilise of the hotel all under one agreement.

“This means the team can cut out the time needed to refinance once the hotel is built, saving them a big headache further down the line. Adi and the team have an outstanding track record and a strong vision for bringing Hilton’s Motto brand to life in Manchester, so we’re proud to play a role in supporting this exciting regeneration project.”