Invesco Real Estate, the global real estate investment manager, alongside Development Manager YardNine, the property development and asset management company, have agreed contracts with USS to forward fund 40 Eastbourne Terrace at a price of £143m.

Invesco Real Estate and YardNine signed a pre-let with Whitbread plc in January 2021 for a new 369-bedroom hotel and restaurant as part of a major mixed-use development on a 35-year index linked lease at 40 Eastbourne Terrace next to Paddington Station.

The hotel will comprise a 275-bedroom Premier Inn, a 94-bedroom hub by Premier Inn and Whitbread’s premium Bar + Block Steakhouse restaurant – the first time all three brands will occupy the same building.

Invesco Real Estate acquired both 40 and 50 Eastbourne Terrace on behalf of one of its US separate account clients in July 2018. The redevelopment of the two sites, in conjunction with YardNine, will provide 75,000 sq ft of Grade A office accommodation, with 10,000 sq ft of retail space and seven mews houses – all due for completion by the end of 2021. Work on a 369-bed hotel is already underway and is due for completion in 2023.

Located directly opposite London Paddington station, adjacent to the entrance to the Elizabeth Line, tenants, residents and guests will benefit from close proximity to national and local travel links, the leisure, retail and dining options of Paddington Basin and the West End, and the green space of Hyde Park.

The scheme has been designed by leading architects Sheppard Robson.

RX London and Ashursts acted for Invesco Real Estate and JLL and DLA Piper acted for USS.

Mark Younger, Director of YardNine said:
“The progress we have made at 40 and 50 Eastbourne Terrace since acquisition – physically separating the buildings, securing vacant possession, achieving planning consent for both the hotel and an additional floor on 50 Eastbourne Terrace, pre-letting the hotel to an outstanding hotel operator and securing funding for 40 in just three and a half years – is a testament to the hard work of all involved, particularly during a global pandemic. We are now just weeks away from completing Fifty Paddington, our office development at 50 Eastbourne Terrace, and look forward to seeing our ambitious plans for 40 Eastbourne Terrace starting to take shape.”

Richard Chambers, Senior Director – Fund Management, Europe at Invesco Real Estate, said:
“We are delighted to be able to realise the efforts of the work and commitment by our teams over the past three-and-a-half years on this exciting project. The attributes speak for themselves: attractive long income prospects, a strong brand and operator together with outstanding underlying real estate fundamentals have combined to enable us to successfully deliver on the strategy for our client, in spite of the pandemic.
“Working with YardNine, we look forward to delivering what we believe will be a notable hotel scheme for Whitbread, a strong investment for USS and a great amenity for Paddington, sitting alongside our landmark office development, Fifty Paddington at Eastbourne Terrace.”