Hotels & Leisure
citizenM checks into European portfolio refinancing
Innovative boutique hotel developer and operator citizenM has hit the headlines in recent years for its attempt to reinvent the traditional hotel model.
The concept is simple – pioneering Dutch design, the latest modcons, luxury bars and restaurants, motivated ‘ambassadors’ and small but perfectly formed pod-style rooms. citizenM only operates
in prime metropolitan cities and airports to serve those travelling for business or a city break.
The Amsterdam-based company currently has 11 hotels operating in Amsterdam, Rotterdam, London, Glasgow, Paris, New York and Taipei. Another nine are in development, spread across Paris, New York,
LA, Seattle, San Francisco, Boston, Shanghai and Kuala Lumpur. In addition, the hotel chain is actively looking for new projects throughout Europe, North America and Asia-Pacific.
Using a modular construction technique of stacking sealed units consisting of already completed hotel rooms, citizenM is able to reduce construction times and significantly lower the costs of developing new sites, making it
an attractive option for investors.
Until last year, citizenM financed its new developments with separate debt facilities from European banks including HSBC, RBS, Barclays and ABN AMRO. Having previously advised citizenM on several of these debt facilities, in 2016 CMS teams in London, Amsterdam, Glasgow and Paris acted on a refinancing of all the completed hotels into one large ‘portfolio facility’ with HSBC and ABN AMRO.
citizenM is not your usual hotel group. It owns all the intellectual property and both develops and operates the hotels. This makes it a relatively unique proposition for lenders.
Keith Ham ∙ Partner ∙ CMS London
“The client has strong ties to CMS’s London and Amsterdam offices and we came in on the financing work because they liked our track record in the hotel and leisure industry. Essentially, we took the complex existing debt arrangements for the pan-European portfolio and put them all into one facility.”