Bank completes £30m loan to fund plans for 10 new aparthotels
Manchester-based OakNorth Bank, the UK bank powered by OakNorth, has completed a £30m loan to Staycity Group, a leading European aparthotel operator.
Founded in 2004, Staycity is an Irish-owned pan European aparthotel business with 21 properties across the UK, France, Ireland, Italy and Germany.
The business operates under two brands – Staycity Aparthotels and its premium Wilde Aparthotels by Staycity.
With the capital from OakNorth, along with the equity raise that has just been completed, Staycity will forge ahead with plans to open another 10 aparthotels in 2021 and operate some 15,000 keys by 2026/27.
Staycity’s properties appeal to both business and leisure travellers who are looking for a user-friendly alternative to traditional hotels, but with great service, 24-hour reception and the option of self-catering if they choose.
The properties are typically made up of studios, one-bedroom and two-bedroom units with fully equipped kitchens, a dining area, sitting area and weekly housekeeping.
Many sites have car parking and in normal trading times offer a gym, guest lounge, laundry facilities and Staycafé selling breakfast, all-day snacks and drinks.
In June this year plans were approved for a new StayCity-operated 310-bed aparthotel on Manchester’s Deansgate.
The 21-storey hotel will occupy 325-327 Deansgate – playing a key role in the continued regeneration of the Southern area of the city centre .
Tom Walsh, CEO and co-founder of Staycity, said: “We very much enjoyed the process of refinancing with OakNorth and we are looking forward to working with the great team there for many years to come.
“The pandemic has hit the hospitality sector particularly badly but being an aparthotel operator, we expect to have a faster recovery than traditional hotels as travellers seek the safety of self-catering accommodation and service at an attractive price.
“We fully expect to emerge in a strong position to move forward and fulfil our ambitious five-year business plan.”
Deepesh Thakrar, senior director of debt finance at OakNorth Bank, said: “Staycity is a phenomenal business – it has been profitable both at the site level and group level for 15 of the 16 years it’s been operating and has an almost 90% customer satisfaction level – a clear demonstration of both the strength of the business model and the management team.
“Staycity expects to benefit from its diverse mix of clientele, which includes both domestic and international leisure travellers across 30 major European cities.
“The team has prudent projections in relation to overall performance and occupancy rates over the next year, as well as exciting longer term ambitions, so we’ll have plenty of opportunities to support them again in the future.”
OakNorth Bank was advised on the deal by Lee Federman, partner at Jones Day.