UBS Funds New East London Hotel and Office Development as Motel One With 30-Year Lease
Main Photo: 39 East Road, the site for the new Motel One hotel and offices
Date: April 2022
Name: Motel One
Location: 39 East Road, close to Old Street tube, East London, England, UK
Number of Keys: 210
Seller: The 11,100 sqm scheme will see the demolition of a five-storey 1980s office block known as Dial-a-Cab House. Officers said this had been in lawful use continuously for just six months in the past three years.
Buyer: UBS Asset Management Real Estate and Private Markets, with development partners BSW Land and Property and the Pickstock Group
UBS Asset Management Real Estate and Private Markets (UBS-AM REPM) is to provide equity funding for the development of a new hotel and office asset in central London.
The transaction is formed as a joint venture, with UBS-AM REPM providing funding alongside development partners BSW Land and Property and the Pickstock Group. Once completed the property will have a value of more than £100m.
The 23-storey building will include 18 floors of dedicated hotel space, above c.25,000 sqf of office space.
The development is underpinned by a 30-year lease to hotel operator Motel One. The office space at the site aims to facilitate new hybrid working models, and plans to achieve ‘Excellent’ BREEAM certification.
The asset, which will be owned fully by UBS, is situated near to both the City of London financial district and Shoreditch. UBS-AM REPM was advised on the transaction by Savills (occupational) and JLL (debt).
Gijsbert van Riemsdijk, head of investment management, EMEA ex DACH at UBS-AM REPM, said: “The development of 39 East Road presents an exciting opportunity for our clients. The asset is expected to provide attractive risk-adjusted returns driven by the 30-year pre-lease in place to a strong hotel operator, which accounts for approximately 70% of the end value of the scheme. We look forward to managing the development of the site in the coming years alongside our partners, with its location and profile aligning well with our positive outlook for the Central London market.”
In July 2020 Hackney councillors have approved a £40 million Flanagan Lawrence-designed hotel and office tower close to the capital’s Silicon Roundabout. The east London borough’s planning sub-committee this month granted consent for the west London practice’s 23-storey scheme just north of Old Street Tube station.
Backed by developer Summix, the tower at 39-47 East Road will contain seven floors of office space below a 210-room hotel.
Flanagan Lawrence amended the design of its scheme twice in response to feedback from Hackney’s design review panel, and later chopped 15m off the height of the building following talks with planning officers.
Price: Undisclosed
THPT Comment: Great news for Motel One and this part of London
First Seen: Hospitality Insights
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