Union Hanover Securities and Southern Grove have bought a vacant Whitechapel office block for conversion into a new format of hotel which it plans to roll out across the country.
The joint venture has bought Black Lion House , E1, from CIT for £16m, funded with debt from Topland BridgePoint Ventures and EquityBridge Asset Management.
The 75,000 sq ft office block will be converted into a flexible hotel with self-catering facilities designed to appeal to corporate customers during the week and leisure guests at the weekends.
The format, which is growing rapidly in the US and Asian markets, is a hybrid of serviced apartments and hotel.
The JV claims the model will benefit from lower overheads and longer occupancy, therefore delivering higher margins.
The concept will operate under the brand Urban Villa.
The funding package included a 76% LTV facility from Topland, with Bridgepoint Ventures and EquityBridge Asset Management arranging the balance.
New York-based architect Grzywinski+Pons and hotel specialist Dexter Moren Associates have been appointed to create a “Manhattan feel boutique 220-bed hotel” on the site at 45 Whitechapel Road.
The JV is now seeking an operator to run the rooftop restaurant and has held preliminary discussions with New-York based chefs.
Ian Eggers of project and construction management specialist Rise conceived the scheme and will lead the delivery process.
Union Hanover director Andrew Fowler said: “Urban Villa has two distinct design-led identities: edgy Manhattan Loft-style common areas and spacious four-star luxury hotel rooms.”
Andrew Southern, chief executive officer of Southern Grove, said: “We were very pleased with what Topland offered, not just the higher gearing. They instantly got our business model and were fast and responsive to our needs. They delivered.”
Eric Jafari of BridgePoint Ventures said: “We believe that this project will have a significant impact on lifting the area and yet helping the area maintain its character and edge.”
Dexter Moren has submitted plans to Tower Hamlets.
Jack.Sidders@estatesgazette.com
