M&G inks Hyatt Centric deal at £350m Haymarket scheme
Edinburgh Council has completed a 25-year leasing deal with M&G Real Estate and its property development partner, Qmile Group, for a Hyatt Centric hotel at the £350m Haymarket Edinburgh development.
The 349-bedroom hotel, which will measure 200,000 sq ft over seven storeys, will be Hyatt’s first four-star offering in Scotland.
Last year the council entered a 25-year lease for the hotel, sublet to the Edinburgh International Conference Centre. There are no break options. Under the terms set out at the time, the EICC will operate the hotel under a franchise agreement with Hyatt.
Edinburgh Council has completed a 25-year leasing deal with M&G Real Estate and its property development partner, Qmile Group, for a Hyatt Centric hotel at the £350m Haymarket Edinburgh development.
The 349-bedroom hotel, which will measure 200,000 sq ft over seven storeys, will be Hyatt’s first four-star offering in Scotland.
Last year the council entered a 25-year lease for the hotel, sublet to the Edinburgh International Conference Centre. There are no break options. Under the terms set out at the time, the EICC will operate the hotel under a franchise agreement with Hyatt.
Works will start immediately, with completion slated for 2025. M&G is also funding the development of a hotels school and training academy.
The deal comes after M&G prelet all 390,000 sq ft of offices at the development.
Aaron Pope, director of asset management at M&G Real Estate, said: “Edinburgh is not only a financial and business centre… it is a tourist destination. More people are going up to Edinburgh and it’s getting busier.”
While the hotels market is still regaining its footing after the Covid-19 pandemic, Pope is upbeat that it will have made a solid recovery by the time it opens in three years.
“From the discussions we had with the council and Hyatt, I don’t think they’re too concerned about filling these rooms when it does complete,” said Pope.
Going forward, M&G will seek opportunities similar to Haymarket throughout the UK where it can identify a “lack of great space”. Pope said M&G is actively progressing its projects in London’s West End in particular, where it expects the ongoing lack of supply to come through amid pressures on build costs.
Pope said the firm’s main challenge with the scheme, which M&G bought for £49.1m, is demonstrating to the market that it will be a success. The site has been derelict for 50 years, with several other developers failing to make it work.
Pope said: “The only way in which I think you could demonstrate that was to speculatively start building on site.
“As a large institutional investor, we could demonstrate that we’ve done this already in Reading, Leeds and Glasgow. So we tried to convince the market that we were serious and started building out. I think that’s when everything started to happen and interest progressed from there.”
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Image © Qmile Group
