Investment manager Lothbury to fund development of York boutique hotel

A 1960s building previously known as Yorkshire House in york is set to be transformed into a new Malmaison boutique hotel.

Lothbury Investment Management, on behalf of Lothbury Property Trust, is set the development of the hotel.

Located on Rougier Street, the new hotel will sit within the historic city walls and close to York’s railway station.

Once complete, the hotel is set to provide 150 bedrooms and a new rooftop ‘sky bar’.

The scheme will have a development value of around £44m reflecting a net initial yield of 4.54%.

Malmaison have agreed to a 35-year lease with RPI-linked rent reviews every five years, between 0% and 4%.

Mark O’Mullane from Lothbury Investment Management, said: “This is a major investment which provides almost-certain rental growth in line with inflation.

“It also increases Lothbury Property Trust’s exposure to the hotel sector, which fulfils a longstanding objective to acquire another hotel asset to complement our existing Edinburgh hotel. It also improves the average weighted unexpired lease term of the Fund.”

Work on the hotel is commencing in the spring, with completion scheduled for Q2/Q3 2019.

Yorkshire Ventures will act as development manager.

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