PPHE Hotel Group has entered into a new £87m 10-year refinancing agreement for the Park Plaza Victoria London, with a fixed interest rate of 3.41% per year.
The deal against the 299-bedroom hotel, which has been independently valued at £161.5m, has been arranged by Cornerstone Real Estate Advisers Europe LLP, a member of the Mass Mutual Financial Group (Cornerstone).
The hotel is currently part of a five-year term facility provided by Aareal Bank AG, which will remain in place secured on two of PPHE Hotel Group's London hotels and six of its Dutch hotels.
New funding is expected to take effect from 5 April, subject to conditions and the deal will be used to repay £64.8m of the Aareal Bank deal. The balance will be used to fund the group's ongoing development programme.
The group is also in discussions about long-term financing for another one of its London hotels.
Boris Ivesha, president and chief executive officer of PPHE Hotel Group, said: "As previously announced, the board is keen to take advantage of current favourable market conditions and we are delighted to have secured the refinance of Park Plaza Victoria London. This agreement marks the start of a new relationship with Cornerstone and Mass Mutual and we are delighted with their commitment and support.
"The new facility enables us to invest further in this well-established and well-performing hotel and our experienced management will continue on optimising its performance, growing its market share and delivering great customer service."
The group operates hotels under the Park Plaza Hotels & Resorts brand under licence from Carlson and owns the art'otel brand.
It owns, leases, manages and franchises 38 hotels, predominantly in Europe, with a total of more than 8,300 rooms. The development pipeline includes five new hotel projects and one hotel extension. These developments are expected to add nearly 1,100 rooms to the group's portfolio by the end of this year and an additional 500 rooms by the end of 2019.