The listed old Post Office and adjoining former County Court buildings on Westgate Street in the centre of the capital will be transformed through a new joint venture between the Welsh Rugby Union, financial services giant Legal & General and property development firm Rightacres.
The Portland stone built and now vacant former Post Office building, which was designed by Sir Henry Tanner and opened in 1897 as part of Queen Victoria’s diamond jubilee celebrations, has been acquired for the project from a London-based investor.
The smaller County Court building, which was constructed in 1904, is already in WRU ownership.
The new hotel, which will maintain and enhance the building’s existing listed facades, is expected to be run by the five star Celtic Manor Resort in its first project outside of Newport.
Known as the Westgate Hotel, and next to the Principality Stadium, it will feature:
- 175 bedrooms, including 15 VIP suites.
- Two restaurants, including a rooftop offer.
- A spa and rooftop infinity spa pool.
- Meeting facilities and a ballroom for 400 guests.
The project, including the acquisition of the former Post Office building, is being forward funded by L&G.
The former Post Office building, known as Parkgate, was occupied by BT but as part of the deal has surrendered its lease.
The WRU and Rightacres will form a new joint venture company to refurbish the buildings.
They will repay L&G over the long-term. The profit margin generated from hotel rental income, will be shared between the partners.
The WRU is expected to reinvest part of its profit margin from the hotel into the professional game in Wales through the Professional Rugby Board.
Chief executive of the WRU, Martyn Phillips, said: “Principality Stadium is internationally recognised as an iconic destination for rugby, other sports, music and other live events by fans from around the world.
“Developing this new hotel will allow us to diversify and supplement our current stadium-based hospitality and conference offering with the additional revenue generated through this business reinvested back into the game at all levels.”
Paul McCarthy, chief executive of Rightacres said: “There is no doubt that central Cardiff has been missing a luxury hotel for a long time and this is a special opportunity to bring activity and vibrancy back into the iconic Post Office building.
“Given that this project involves the restoration of an historic building, each guest room will have its own unique layout with distinct features including the original turrets, eaves, windows and skylights.”
Subject to planning and listed building consent, construction work will begin in June this year with the hotel scheduled to open in December 2020.
The forward funding by L&G is on behalf of L&G General Retirement Institutional.
Welshman Tom Roberts, head of strategic investment at L&G. said: “We are delighted to be funding what is widely regarded as the best hotel site in Cardiff and entering into partnership with the WRU and Rightacres.
“It is a unique opportunity to create a rare long income cashflow while facilitating the development of a new market-leading hotel in one of the fastest growing capital cities in Europe and top UK cities with the added advantage of being adjacent to Principality Stadium.
“There are also clear benefits to having a hotel of this quality alongside our substantial current investments in Central Square.”
L&G has forwarded funded Rightacres’ Central Square scheme in the centre of Cardiff, which is providing one million sq ft of new office, residential and retail space.
Rightacres is also behind the Central Quay development on the historic Brains Brewery site.
Cardiff based law firm Hugh James acted for the WRU, with Acuity for Rightacres.
The Cardiff office of property advisory firm Knight Frank acted for the owner of the Post Office building
The value of the scheme has not been revealed, but it is understood to be in the region of £45m.
Partner and head of commercial property at Hugh James, Peter Hurn, said:”Diversifying into the hotel market is a major, but natural move, for the WRU, especially given this location on the stadium’s doorstep.
“This is excellent news for Cardiff where hotel accommodation of this calibre in such an iconic location will serve a ready, year-round market.”
Source: Business Wales