UKCM has bought a Hyatt Hotel development opportunity in Leeds for £63m.
The REIT bought the scheme from Marrico Sovereign Square, a joint venture between Marrico and Helios. The site itself, on Sovereign Square adjacent to the city’s main train station, is owned by Leeds City Council.
UKCM will fund the DLA Architecture-designed development, which is to be completed by Marrico, for a total commitment of £62.7m. The 12-storey hotel will is scheduled to complete in 2024 and will have a 25-year franchise agreement in place with Hyatt Hotels.
The hotel will be operated under a lease by Interstate Hotels & Resorts, with UKCM’s rental income based on the income generated from the operation of the hotel.
The 140,000 sq ft property will comprise 305 rooms, split between the short stay Hyatt Place and the long stay Hyatt House brands. The upscale hotel will provide meeting rooms, a gym and a rooftop bar with its own dedicated entrance.
The development is targeting a BREEAM ‘Excellent’ rating, and UKCM will work closely with both Hyatt and Interstate to ensure the hotel is run in line with all parties’ strong ESG policies and commitments to minimising energy consumption and wastage.
Will Fulton and Kerri Hunter, fund managers at UKCM, said: “This is the latest acquisition in line with the company’s strategy to enhance earnings by selective investment in assets where the rents are derived solely from their operational performance.
“By investing in this way in compelling locations with strong market dynamics and teaming up with strong, reputable tenants we are able to obtain a yield that is at a significant premium to that which would be derived from a traditional leasing model.”
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