The property market continued to show signs of improvement after the forward sale of a hotel in Birmingham city centre.
Gallan Group has announced that Standard Life Investments, on behalf of South Yorkshire Pensions Authority, has agreed to forward fund the development of a 210-bed Travelodge adjacent to the Bullring.
The hotel forms part of Gallan’s £45million mixed-use scheme in Upper Dean Street – a key regeneration area highlighted in Birmingham’s ‘Big City Plan.’
Full outline planning has been granted for the scheme which will also include a 340 bed three-star-plus Maldron Conference hotel, 18,000sq ft of retail units, restaurants and bars and 10,000sq ft of offices – 90 per cent of the whole scheme has been pre-let.
Anglo Holt Construction has now started on site to build the £13million property with a completion date of April 2011 – and up to 1,000 jobs are expected to result from the total development programme.
Marty Gallagher, director of Gallen, said they were absolutely thrilled to have secured such a positive vote of confidence from two of the country’s leading investors.
“In the current economic climate it is really fantastic news,” he said.
“Over the past couple of years the funding markets have virtually come to a halt and no one has been interested in investing in new developments.
“This is just the sort of initiative we need to boost the local economic recovery and get the property market back on track.”
John Hattersley, fund manager at South Yorkshire Pensions Authority, added: “We are pleased to be working in partnership with Gallan to provide investment funding for this project. The strong city centre location and length of lease provides attractive cashflows and are an ideal match for our pension fund liabilities.”
It is Gallan Group’s second deal with Travelodge in less than six months. In January it secured the opportunity to develop a 60 bed Travelodge on their prestigious £20million Gallan Park mixed-use scheme in Watling Street, Cannock.
Neil Bowler, of Jenics, who represented Travelodge in both transactions, said: “Our close relationship with Gallan has ensured this has been a smooth process which has enabled us to do this deal quickly and efficiently, we hope to do more with them in the future”