Northern Irish developer McAleer & Rushe is lining up German open-ended fund manager Commerz Real to forward-fund its hotel scheme on Southbank, SE1.
The parties are understood to be in negotiations over a £73m forward funding of the HKR Architects-designed development at 46-49 Blackfriars Road .
The Cookstown-based developer got permission to build two hotels, with a total of 477 bedrooms and 2,500 sq ft of restaurant and bar space, in August last year. Construction work has not yet begun.
Proposals included the demolition of the vacant former Waterman Group building to make way for the two- and four-star hotels.
They will be operated by French group Accor through its Novotel and Ibis brands.
The four-star hotel will have 182 bedrooms, while the two-star hotel will have 295. A gym, swimming pool, steam room and sauna are planned for the basement.
Accor already operates three SE1 hotels – the Mecure London City Bankside, the Novotel London City South and the Novotel London Waterloo.
The move is a latest in a string of deals agreed by funds which are returning to the forward-purchasing market.
In June, Standard Life Investments, on behalf of South Yorkshire Pensions Authority, agreed to forward-fund a 210-bedroom Travelodge in Birmingham that is being developed by Gallan Developments.
Canada Life has also agreed to forward-fund Wilson Bowden Developments’ 616,000 sq ft warehouse, which it is building for sports retailer JD Sports at its Kingsway business park in Rochdale , Greater Manchester.
McAleer & Rushe, with funding from Bank of Scotland, bought the office and car park site on Blackfriars Road from a Catalyst Capital-led consortium for £23m in October 2007.
