Bank completes £4.8m loan to private equity-backed boutique hotel brand
Manchester-based OakNorth Bank has provided a £4.8m loan to returning client, House of Gods Hotels, the boutique accommodation business.
Founded by brothers Mike and Ross Baxter, House of Gods Hotel in Edinburgh was partially funded via a £1.1m loan from OakNorth Bank in 2019.
In February this year the business secured a £5m investment from IMBIBA, the specialist operator-led leisure and hospitality sector investor, to expand the brand.
The new £4.8m capital, coupled with the £5m IMBIBA investment, will be used to further expand the House of Gods brand, with two new four-star boutique hotels in Glasgow and Manchester.
Like their Edinburgh counterpart, the new editions to the portfolio will attract tourists and locals alike, with luxurious decor and intimate cocktail bars.
Mike and Ross Baxter said: “We’re very excited to be expanding the brand.
“The Edinburgh Hotel has been incredibly well received and we feel both Glasgow and Manchester are the perfect locations for the two new hotels.
“It’s been a challenging year for the industry but with the support of Mohith and his team at OakNorth Bank, the business has traded very well and found opportunity in two fantastic new sites.”
Mohith Sondhi, senior debt finance director at OakNorth Bank, said: “Prior to COVID-19, The House of Gods hotel in Edinburgh had been trading extremely well.
“When hotels were allowed to re-open in late April this year, it achieved 90% occupancy in May and 95% occupancy in June – a clear demonstration of the demand for this unique hotel concept.”
Mohith added: “We want to ensure the business has the capital it needs to not only take advantage of the demand when all restrictions end next month, but to also maximise opportunities to continue growing the brand in the meantime.
“Since our last loan to the business in 2019, Mike and Ross have beefed up the senior management team with two excellent hires and have secured investment from one of the leading investors in this space. It is businesses like House of Gods Hotel that will play a vital role in the UK’s post-pandemic economic recovery, so it is essential they get the support they need to not only survive, but also thrive.”
