M&G buys site for new £203m Paddington hotel

M&G Investments on Thursday displayed a major vote of confidence in London, agreeing to invest in building a £203 million hotel in Paddington.

The asset manager said it has bought the long leasehold interest in a site in North Wharf Road from an unnamed vendor. It will fund the development of a 620-bedroom hotel there, with construction due to complete by 2021.

The firm has already lined up 30-year leases with Whitbread’s Premier Inn and short-stay apartments group Staycity, with the operators respectively taking 60% and 40% of the rooms.

M&G’s spend, plus the letting deals, comes despite clouds hanging over the leisure market, including Brexit jitters and weaker UK consumer confidence.

Kevin Vickers, M&G Real Estate’s investment director, said: “London is one of Europe’s best-performing hotel markets.” He added: “Business travellers continue to seek well-connected and affordable central London accommodation.”

It is Whitbread’s first new hotel commitment since the £3.9 billion sale of its Costa Coffee arm this month, leaving Premier Inn as its main business.

Jonathan Langdon, acquisitions manager (central London) at Whitbread, called Paddington one of the capital’s “most vibrant and well-connected areas”.