The art deco Burgh Island Hotel has completed a £5.4m refinancing led by Metro Bank to support the refurbishment of the iconic venue, which is situated on its own private tidal island off the coast of South Devon.
In addition to enhancements being made to the hotel’s décor, preserving its large collection of art deco antiques and architectural features, as well as its original Crittall windows, the funding will be used to reinforce sea defences to prevent cliff erosion.
The refinancing coincides with the news that the Burgh Island Hotel has been withdrawn from the market despite the owner receiving attractive offers for the asset.
Giles Fuchs, owner of Burgh Island Hotel, said: “I am delighted to announce that I will be continuing as the owner of Burgh Island. The refinancing agreed with Metro Bank will facilitate further investments in the hotel and enhance its infrastructure, services and beauty while maintaining its art deco authenticity and commitment to sustainability.”
Nicholas Kalamaras, head of hospitality and leisure at Metro Bank, added: “We are very pleased to support the Burgh Island Hotel’s drive to further enhance its proposition, services, and sustainability. It is already recognised as one of the world’s most admired hotels and is highly valued by its guests. Its location, exceptional services and unparalleled quality make it a unique establishment, but with its own challenges too, which this refinancing will help the owners address. Supporting the hotel is in line with our ambition to support leisure and hospitality businesses in fulfilling their growth potential and achieving their strategic goals.”
Richard Herring, co-founder of Westfort Advisors, which advised Burgh Island Hotel, said: “It was a pleasure supporting Giles in securing funding for such a beautiful and unique property. As such, it’s generally less exposed to regional changes in hotel supply and demand and is a proven inflation hedge, having maintained strong seasonal occupancy and ADR growth – offsetting cost increases seen across the sector.
“The owners are well-capitalised and their focus on restoration and sustainability will promote long-term value growth. That said, procuring debt was not plain sailing, given general market challenges in underwriting operational risk for owner-occupied hotels. Working alongside Metro Bank, though, we were able to deliver a full refinancing package, plus all immediate CapEx funding to support the hotel’s long-term business plan.”
