Criterion Capital has secured a £25 million investment facility from Bank of London and The Middle East for a office-to-hotel conversion in London’s Trafalgar Square.
The investor is looking to convert the upper floors of the Trafalgar Buildings into a hotel under its expanding Zedwell brand. CoStar data shows it bought the buildings from Royal London Asset Management for £50 million last year.
Conversion plans fit into the group's strategy to preserve historical architecture while adapting properties to meet contemporary needs. The building was constructed in the early 1880s and has an ornate stone-faced facade.
BLME said that its three-year facility "underscores Criterion Capital’s broader strategy of revitalising obsolete buildings by repositioning them as affordable residential apartments and lifestyle hotels, while minimising environmental impact".
Criterion Capital director Omar Aziz said in a statement that its plans to convert Trafalgar Buildings represented a "key milestone" in the strategic UK-wide expansion of the group's Zedwell hotel portfolio.
He said: "As the first serviced office building in London, and previously occupied by Regus, Trafalgar Buildings is undergoing a thoughtful and carbon-efficient repositioning.
"Rather than demolishing, we are reimagining it into a use that not only supports local employment but also contributes positively to the surrounding area."
He added: "Trafalgar Square’s international status and high footfall offers a unique opportunity to advance our commitment to sustainable tourism, adding significant momentum to our strategic growth, with more than 7,000 rooms in our Zedwell pipeline."
The deal comes as BLME research on Gulf Cooperation Council investment in the UK commercial real estate market predicts that investment is set to hit over $4 billion (£3.08 billion) annually, driven by cuts to interest rates and greater political stability.