Boutique + Lifestyle Hotel Summit (05.18)
Philip was invited to moderate a panel at the Boutique + Lifestyle Hotel Summit in London in May 2018 on the subject of "The Lending & Investment Landscape". Many thanks to the excellent panellists: Lissa Engle (Berkeley Capital), Andrew Harrington (AHV Associatesd), Trevor Morris (OakNorth Bank) and David Orr (Naddler Hotels). Key takeaways included:
- Banks will consider leases and HMAs equally. The key lending criterian is the underlying sustainability of the income, not necessarily the operating structure.
- Local authorities are starting to invest in hotel development projects, faciitated by recent changes to legislation and access to very cheap money, in order to improve their hotel offering.
- Crowd funding as a source of funds has yet to gain true traction (the new Brew Dog hotel project is the only example in UK so far), probably because hotel projects do not generate the 'hockey stick' style returns such investors seek.
- Ground rents are a useful funding tool, but may have an impact on resale values and could reduce the amount of senior debt available.
- Mezzanine loans or pref-equity is becoming more mainstream and many family offices are interested in providing such funding.