A portfolio of three Grade II listed townhouse hotels in Argyle Square, Bloomsbury, has been refinanced with a £10 million term loan arranged by FRP Real Estate Advisory. The properties, located near King’s Cross station, recently completed a refurbishment programme to reposition them as boutique hospitality assets.
The five-year facility, structured at 65% loan-to-value, replaces an existing capital expenditure loan used to fund the refurbishment works. The transaction was completed during the portfolio’s stabilisation period, with minimal post-refurbishment trading data available to underwrite.
Lender underwrites forecast income
Philip Kay, director at FRP Real Estate Advisory, who arranged both the original capital expenditure facility and the refinancing, said the deal required identifying a lender willing to underwrite projected income rather than historical trading performance. Kay had previously worked with the client on the initial refurbishment financing.
The properties benefit from proximity to King’s Cross station, the Eurostar terminal, and the wider King’s Cross regeneration area, providing transport connectivity to one of central London’s active development zones.
Hotel investment activity increases
The refinancing comes as UK hotel investment shows renewed activity. According to Savills’ latest UK Hotels market report, total UK hotel investment reached £2.1 billion in the first half of 2026, approximately £500 million higher than the same period in 2025, with London representing the majority of transaction volume.
Savills identifies sustained demand, development constraints, and appropriate product positioning as factors supporting performance in the current cycle. The report notes that active ownership and operational capability are becoming increasingly significant to investment returns.
The hospitality sector refinancing activity contrasts with recent trends in other property sectors, including declining buy-to-let company formations and concerns over rising mortgage costs affecting residential investment.
Kay stated that the five-year term provides operational stability for the client without requiring near-term refinancing. He noted that the transaction demonstrates lender confidence in well-positioned hospitality assets in the London market, even without extensive trading history.
The deal represents a financing approach based on forward-looking asset performance rather than historical data, reflecting lender appetite for repositioned hotel properties in established London locations with strong transport links.
