Welsh developer Barola has agreed a £34m forward funding deal with Aviva Investors’ Lime Property Fund for its redevelopment of the former Custom House building in Cardiff into a new hotel.
Planning consent for the new hotel was obtained in November 2017 and Barola has agreed a pre-let with Premier Inn. The hotel will provide 248 bedrooms over 17 floors, incorporating a Whitbread branded Bar & Block restaurant at ground and mezzanine levels fronting Custom House Street and St Mary Street.
Construction on the conversation of the 125,000 sq ft, 20-storey hotel and bar will begin after Easter with opening forecast for late 2019. Premier Inn has signed a 30-year lease from completion of the building at a rent of £1.48m pa with a tenant break after 20 years.
The new hotel will retain the listed Custom House facades and form part of the regeneration of Mill Lane and the Brewery Quarter alongside the redevelopment of Cardiff Central Station, which is 100 metres from the site.
Jamie Devonald of Barola said: “We are delighted to have concluded a forward funding agreement with Aviva Investors to develop this important site and look forward to delivering a landmark building for both the Lime Property Fund and Premier Inn. In recent years our development activities have taken us away from Wales so it will be especially gratifying to undertake a project in Cardiff, our home city.”
Aviva’s Lime Property Fund is a secure income long lease property fund managed by Aviva Investors with a net asset value of over £2bn. Kris McPhail, co-fund manager of the Lime Property Fund at Aviva Investors, added: “We are very pleased to be working with Barola on this opportunity. This transaction provides our institutional clients with inflation-linked cash flow from a strong tenant and a property that is well located. These are exactly the type of investments we are actively targeting for the Lime Property Fund.”
BNP Paribas Real Estate acted for Barola jointly with Cushman & Wakefield, while JLL represented Aviva Investors.
Source: Property News