Bank to be turned into luxury hotel

MARYLEBONE WARWICK Balfour, the UK property group, has won a pounds 2m contract from Accor, a French hotels firm, to convert a Grade II listed bank building on Pall Mall, in central London, into a luxury hotel.

The building, formerly occupied by Lloyds and the private bank Cox & Co, will be redeveloped as a pounds 50m flagship hotel to rival other luxury properties, such as the Hilton and the Dorchester in Park Lane.

The hotel is Accor's first venture into the UK market and will be branded as part of the group's four-star Sofitel chain. Michael Flaxman, the managing director of Accor Business and Leisure Hotels said: "We believe that the blend of stunning location and architecture that the building offers is ideal for our first incursion into London's luxury hotel market."

The market for luxury hotels in London is growing. A major four star development is planned for Canary Wharf, a 528- room extension of the London Metropole hotel in Edgware Road is already underway and the upmarket Great Eastern Hotel is about to open in the centre of the City.

Conversions are becoming especially popular, despite the difficulties associated with obtaining planning permission and the fact that property companies can often get a better yield from turning unwanted space into an office block. In Camden, construction is underway to convert Victoria House in Bloomsbury Square from a listed office building into a 450-room hotel. Shaws Theatre, also in Camden, has already been turned into a luxury hotel.

The Accor site is located on the corner of Pall Mall and Waterloo Place, near Trafalgar Square and just opposite the Institute of Directors, and will offer conference rooms and banqueting facilities.

The 125,000 square feet building, which has been empty for nine years, was designed and built in 1924 as Cox & Co's headquarters. The freehold is owned by the Crown Estate and the long leasehold interest is being surrendered by Lloyds TSB to Accor as part of the transaction. MWB will begin work in October and the planned completion date is June 2001.