UK: Mactaggart Family & Partners (MF&P), the majority owner of The Resident hotel group, has refinanced with NatWest to pursue development projects and acquisitions.
The five-year loan agreement saw MF&P refinance its freehold owned, operational assets in Covent Garden, Kensington, Liverpool and Soho with a £55 million debt facility.
Last year, MF&P announced a sixth Resident hotel in Edinburgh which is due to open in 2024. Over the next seven years, the company is targeting between 1,500 and 2,000 room additions through management contracts.
William Laxton, CEO at Mactaggart, said: “I am delighted that we have reaffirmed our successful relationship with NatWest with a perfectly fit-for-purpose senior financing that allows us to concentrate on the growth of the business, which is developing into one of our major strategies.
“Not everyone in the hotel sector will benefit from such a strong relationship with their lender and we expect to see the ramifications of this play out in the next couple of years. Many groups in the market will be finding themselves over-leveraged, particularly from a cash flow and debt service perspective, and this will mean some difficult conversations, which we expect to drive an increase in transactions, most notably where there is not the capacity to pay down senior and create a more stable capital stack with debt service headroom.
“We also anticipate that owners will be looking for more efficient business models, as operational pressures grow,” Laxton said. “The Resident model delivers a highly-rated, revenue driving product which, through features such as limited F&B, has simplified and lower risk operations that converts through to EBITDA very efficiently.
“David Orr (CEO) and his team are in the early stages of managing Cityroomz and Sleeperz as two new brands to the Resident Hotels stable, so we look forward to the future with nine hotels under management and growth plans already announced, with the tenth, The Resident Edinburgh, opening in 2024 and another very exciting 125-bed (approximately) London development also secured.”
Anthony Say, head of hotels at NatWest Corporate Banking, said: “We are delighted to continue supporting this high-quality hotel investor, developer, operator and brand.
“One of the attractions of The Resident is the support it gives its teams, which promotes valuable high retention rates and delivers the guest service which drives important loyalty. We look forward to continuing to support The Resident’s ambitions in the future.”