EasyHotel is planning to remodel the upper floors of its Old Street, London, hotel to create office space having been refused retrospective planning permission for 78 of its rooms.
The existing hotel includes 162-bedrooms, but under the new plans it will be scaled back to 92-bedrooms while an extension will be built to the third to fifth floors of the building to accommodate office space.
In March the budget brand lost an appeal against Islington Borough Council's refusal of retrospective planning permission relating to 78 of the 162 rooms at the hotel.
The property was originally acquired in June 2012 for £10m as a 92-bedroom hotel, before being extended to 162 bedrooms without planning permission in 2014.
As a result of the new plans the upper floors of the hotel will now be closed from 3 October 2017.
EasyHotel plans to refurbish the remaining hotel space in line with its new Birmingham and Manchester sites. It believes this will improve revpar at the hotel.
The existing (162-bedroom) Old Street hotel made EBITDA of £1.7m in the group's last financial year ended 30 September 2016.
EasyHotel chief executive Guy Parsons said: "After undertaking extensive due diligence and considering all the options available to it, the board considers the retention of the 92-bedroom hotel, together with an extension to the upper floors for additional office accommodation, to be the best outcome for shareholders.
"We have been delighted with the performance of our newly opened hotels in Birmingham and Manchester, which are trading strongly, and the refurbishment of Old Street will enable us to improve revpar in the hotel. The group will submit a full planning application for an extension to the building in due course."
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