The Qatari Diar Real Estate Investment Co., a division of sovereign wealth fund, the Qatar Investment Authority, completed a £900 million ($1.22 billion) refinancing of the 144-room The Chancery Rosewood, the luxury London hotel that opened in September in the former US embassy.
Half of that total was made reference to.
In a LinkedIn post, Amit Kashyap, group chief financial officer, Qatari Diar, said £450 million of the financing was secured from four banks — Doha Bank, Mashreq Corporate & Investment Banking Group, Standard Chartered and United Overseas Bank.
He added that the 50% loan-to-value financing reflects “both the quality of the underlying asset and the lenders’ appetite for well-located, income-producing trophy hospitality in London.”
According to Completed RE, “major refinancing for the development has been facilitated through a … Sharia-compliant sale-and-leaseback ‘ijara’ transaction. This landmark agreement stands as one of the largest Islamic financing deals in the global real estate market.”
One of the key tenets of ijara is that loans and financing are structured to avoid interest, which is prohibited in Sharia law.
Kashyap added that also significant is that the hotel holds the “distinction of being the world’s first five-star hotel to achieve a BREEAM (Building Research Establishment Environmental Assessment Method) ‘outstanding’ rating.”
Refinancing has been a major lever for hotel businesses, one that has seen a notable uptick since the beginning of the era of higher interest rates, higher operational costs and the higher cost of debt.
Another recent example in London is the £300 million refinancing by Shiva Hotels of the luxury hotel, The BoTree, now The BoTree London, Curio Collection by Hilton.
