£56m loan to fund construction of Ruby hotel-led Clerkenwell development

Real estate investor ASK and OakNorth Bank have provided a £56.2m loan to RE Capital to fund the development of a 74,000 sq ft scheme in London’s Clerkenwell, including the Ruby Stella hotel.

Property investment, asset and development management company RE Capital will use the loan to fund the construction of the mixed-use, hotel-led scheme, on the site of a former Victorian school building and car park.

The scheme will comprise the 153-bedroom Ruby Stella hotel, plus an extension and remodelling of the existing Victorian schoolhouse to include 18,700 sq ft of office space and nine new-build affordable residential units.

Planning consent was granted in January 2020 for a 153-bedroom ‘affordable luxury’ scheme and a pre-let agreement is already in place between RE Capital and Ruby Hotels for 30 years.

HG Construction has begun building, with the hotel due to open next year. Launched in 2014, German group Ruby Hotels has one hotel open and operational in the UK, Ruby Lucy near Waterloo (pictured), with properties in Notting Hill and Southwark also in the pipeline.

Simon Banks, head of UK at RE Capital, said: “The development will be finished to exceptionally high sustainability, wellness and connectivity standards, focusing on cutting-edge interior design for the newly evolving workplace, alongside the quality that Ruby Hotels will deliver as a highly reputable brand.”

Daniel Austin, co-founder and chief executive of ASK, said: “Having funded a number of hotel and office schemes this year, we are fully confident in the recovery of both these markets post-Covid, as the current take up of office space and steady rise in hotel occupancy proves"

Hemesh Patel, director of property finance at OakNorth Bank, added: “Given its central location close to a number of top tourist attractions, wide range of amenities and office buildings, we expect the new hotel to see strong demand from both corporates and tourists.”

RE Capital was advised by Katten Muchin Rosenman. ASK and OakNorth were advised by Mischon de Reya.