Newcastle hotel is bought in multi-million pound deal

A multi-million pound deal to buy a landmark Newcastle hotel is set to trigger the transformation of one of the city centre’s main gateways.

Gainford Group already operates the successful Vermont Hotel and Vermont Aparthotel on Newcastle Quayside, alongside late night venues Aveika and Bar Livello.

Now the growing leisure group – which has law firm Sintons as its long-standing advisors – has revealed aims to create a similarly successful venture at central station, after paying in the region of £12m for the Mercure Newcastle County Hotel. It is set to be renamed The County Hotel, in tribute to its 18th century heritage.

The sizeable freehold sale, which saw the family-run firm beat competition from a host of rival bids, includes 10 retail units within the building as well as the 114-bed hotel, let to tenants including Starbucks, Zapatista and Bowyers of Newcastle, all of whom will remain.

The Grade II listed building, opposite Newcastle Central Station, was originally built as a county hotel in the 18th Century, as part of a redevelopment of the city centre which connected Neville Street with Collingwood Street.

Now, the Gainford Group – which employs more than 2,000 people and is run by the Khaliq family – want to install the hotel as a “jewel in the crown” for the city, revealing plans to refurbish the interior. The venue already boasts 10 meeting rooms with a maximum capacity of 200 delegates and a recently refurbished restaurant with a lounge and bar.

Three empty retail units close to the main entrance, which have lain empty for more than two years, are also poised to be transformed into themed bars and restaurants, akin to their Quayside venues.

Directors at the Gainford Group said: “We are delighted with the acquisition of this landmark hotel in the heart of Newcastle.

“Since the refurbishment of the train station this is a very busy part of the city and we have big plans for the property to restore it to its former glory as to the same standard of our existing businesses currently operating throughout the UK.

“The purchase will safeguard over 100 jobs and take staff employed by the Gainford Group over 2,000.

“We will be looking to start refurbishing the venue shortly with some exciting new ideas including bars and restaurants which should create further jobs in the New Year.

“We see this acquisition from US Pension Fund Amaris as quite simply the jewel in the crown. We would like to thank our advisors who have worked night and day to make this deal happen, ahead of stiff opposition from other interested parties.”

The freehold interest also includes an office building to the rear, offering substantial asset management opportunities to the new owner.

Christopher Welch, Partner in the Corporate team at law firm Sintons, who led the acquisition on behalf of Gainford, said: “The purchase of The County Hotel adds a further prestigious asset to Gainford’s expanding leisure and hotel portfolio.

“We were delighted to work with this long-standing client to successfully secure this asset on behalf of Gainford against a lot of completion in the market for the Hotel and some very tight deadlines which needed to be met.”

The deal comes after Gainford Group carried out a refinancing deal with help from banking giant Santander, involving Angela Chau and Ian Massey, healthcare relationship directors at Santander Corporate and Commercial.

Angela Chau added: “We are delighted to continue working with the Gainford Group especially on this next exciting part of their journey.

“The group invests in their hotels, bars and restaurants to ensure that they provide the very best experience they can for its customers. We very much look forward to a long and fruitful partnership, helping support the business now and in the future”

Property consultants JLL advised Amaris Hospitality on the sale of the hotel.

Gavin Wright, director in JLL’s hotels and hospitality team, who advised on the deal, said: “As a locally based firm, the Gainford Group understand the local market dynamic making the hotel an obvious fit with their existing hospitality and leisure portfolio.

“Having set our closing date post the recent EU referendum we were delighted to receive in excess of 10 offers for this prominent hotel in a primary location.

“Despite initial nervousness regarding the impact that leaving the EU may have on investor sentiment, we continue to see strong levels of interest from a variety of buyers across the regional UK.”

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