Z Piccadilly in the UK capital will have an additional 20 rooms constructed, taking its key count to 132, as well as developing new lift facilities and a new ground floor café.
Entrepreneur-focused financier, OakNorth Bank, provided the funding, which is also being used to refinance an existing loan. Z Hotels has been an OakNorth customer for several years, with it initially securing bespoke funding in 2018 to support its expansion of new sites across central London in Covent Garden, Holborn, and Tottenham Court Road.
Founded by Bev King, the hotel chain launched its accommodation model in London with the opening of Z Soho in 2011. Since then, Z Hotels has experienced continued success with 14 sites now operational, including 11 in London and one each in Liverpool, Bath, and Glasgow, offering 1,710 bedrooms.
Z Hotels’ King commented: “Since our launch 12 years ago, the focus of our brand has continued to be very simple – offer consumers a chain of hotels that are positioned in central locations, with reasonable room rates, that come with modern and stylish designs and high-quality features throughout.
“OakNorth has now supported us on multiple transactions, and we see them as our trusted funding partner that has worked closely with us through the challenging times of both the pandemic and the current cost-of-living crisis. With this latest facility from OakNorth, we are moving to work closer with its team and look forward to further growing the Z Hotels brand across the UK, whilst also expanding our site at Piccadilly.”
Deepesh Thakrar, senior director, debt finance at OakNorth, said: “Z Hotels’ unique proposition has enabled it to build a broad and diverse portfolio in a relatively short space of time and achieve incredibly high occupancy consistently throughout the year. Their focus on high-quality rooms and a premium visitor experience is demonstrated through its 99% room-led revenue, five-star reviews, and an average occupancy across all its hotels of 96%.
“Further to this, Z Hotel’s resilience to the covid pandemic has been exceptional, with the business now exceeding pre-covid trading levels. We’re thrilled to once again have the opportunity to support a best-in-class team and look forward to working with them again in the future.”
OakNorth is very embedded in UK hotel sector investment and is currently providing finance for projects including the refurbishment of 70-key boutique hotel Seraphine Kensington Olympia in London, scheduled to complete in Q1 2024, and House of Gods Manchester, due for delivery in Q2 2024.