The 98-bedroom, six-storey hotel will be built at the bottom of Westgate Road, close to the city’s Central Station, with accommodation aimed at both the business and leisure traveller.
Working closely with Network Rail, Sleeperz will develop a highly visible and recognisable landmark hotel on the former Parcel Works site, alongside the car park of Newcastle Station.With the UK’s holiday trend of ‘staycations’ on the rise, and the latest Government proposals to encourage foreign visitors to boost the economy, the budget hotel market continues to grow. The Sleeperz proposition of compact lifestyle hotels in prime city centre locations offering great value for money sits perfectly in line with these proposals as the accommodation is aimed at both the business and leisure traveller.
Preparation work has already started on site with full construction expected to begin in October. Sleeperz is targeting an opening date of October next year (2011), with the new hotel creating around 25 full-time jobs in the city. Property and construction consultancy Robinson Low Francis (RLF) has been appointed as the employer’s agent and quantity surveyors.
The construction of the company’s second UK hotel follows the announcement of a major £7m investment in Sleeperz Hotels to fund future growth – with the target of achieving a portfolio of 10 hotels by 2015.
Just 18 months after opening the first in a new generation of compact lifestyle hotels – in the Welsh capital of Cardiff – Sleeperz is not only rolling out its plans to build in the capital of the North-East, but also earmarked five further sites for development next to mainline rail stations, including Liverpool, Birmingham and Manchester.
Sleeperz Hotels Chief Executive David Myers said the Newcastle development will mirror the same ethos of compact and comfortable rooms at an affordable price in a stylish environment that has proved to be such a success in Cardiff.
“As with Sleeperz hotel Cardiff, we will create quality high specification compact rooms with fresh, colourful and contemporary interiors. All of this will be available to the consumer at room rates, including free wi-fi, from £50,” he said.
“Newcastle is one of the leading UK hotel markets for RevPar room rate performance. The city boasts a very strong leisure and corporate market and there will be few hotels – if any – with the location that this site will give us. We are very excited about this development.”
Mr Myers described the £7m investment in the company that will help fund the building of the Newcastle project as “a major endorsement in the Sleeperz proposition of compact lifestyle hotels in prime city centre locations offering great value for money.”
The equity finance has been raised from the company’s current investors, including Andre Hoffmann, and a new investor, Connection Capital. The debt finance for the Newcastle development is being provided by The Co-operative bank.
Mr Myers said: “Raising finance is very tough in this market, and to secure £7m of investment via bank and equity finance is an exceptional achievement, particularly for a hotel business of our size.
“The finance we have secured will not only fund the Newcastle hotel development, but also provide working capital for the further expansion we have planned. The hotel market is littered with single-site niche businesses that have failed to expand and progress to develop a second hotel.
“There are so many positives in the Sleeperz brand. Not only have we managed to buck the trend in an increasingly challenging market – but in sticking to our ideals of convenience, value and style, are now driving on to growth and expansion.”
Lorraine Cunliffe
