OakNorth and HSBC have partnered up to provide a £232 million club loan to Splendid Hospitality Group.
The club loan will support future capex works, including the 76-bedroom extension of Hilton London Bankside, which currently has 292 rooms.
Splendid Hospitality’s portfolio currently comprises 24 hotels across the UK in the economy, midscale, upper midscale, boutique, and luxury segments.
Why it matters
While financing costs remain a concern, this deal indicates a growing network of lenders happy to support the hospitality sector. Speaking at last year’s Annual Hotel Conference in September, Christie & Co managing director Carine Bonnejean noted a high amount of capital interested in investing in hotels, forecasting an increase in activity over the next six to 12 months. At the time, she stated “The lending mix is now about 75 per cent alternative challengers versus 25 per cent high street when in the past that mix was about 60 per cent high street and 40 per cent alternative and challengers.”
What they said
Elizabeth Davies, head of real estate finance – hotels HSBC UK said: “HSBC UK has enjoyed a strong relationship with Splendid Hospitality for many years and we are proud to continue supporting this best in class, family business. Our partnership with Splendid Hospitality reflects HSBC’s enduring commitment to the UK hospitality sector, and our ability to provide bespoke funding solutions to realise clients’ ambitions.”
Ben Barbanel, head of debt finance at OakNorth added: “This transaction was very exciting not only because it gave us the opportunity to support this incredibly strong family-business, but also because it is the largest club deal we’ve ever participated in. The hospitality industry is facing numerous challenges, from staff shortages to the cost-of-living crisis, but despite these headwinds, Splendid Hospitality continues to find opportunities to expand and further enhance its impressive portfolio.”
Nadeem Boghani, vice chairman at Splendid Hospitality added: With the support of OakNorth and HSBC, we’ll be able to continue delivering the exceptional service and quality, as well as the extraordinary experiences our guests have come to know us for over the decade.”