A loan of about £1 million has been provided to an Edinburgh-based accommodation business, helping drive the expansion of a new boutique hotel brand with a view to scaling it to five sites over the next three years.
OakNorth Bank – the UK bank powered by SoftBank-backed fintech unicorn OakNorth – has provided a £1.1m facility to BXTR, the boutique accommodation specialist founded in 2014 by brothers Mike and Ross Baxter.
They are looking to grow the House of Gods boutique hotel brand, starting with a 22-bedroom four-star property in Edinburgh that opened last month. The city was the home of their first project, the 46-bedroom Baxter Hostel on the Cowgate.
Aimed at tourists and those working in the tech and start-up sector, the hotel in the Cowgate also offers a 40-cover cocktail bar inspired by “rock’n’roll’s bohemian past”, with a cocktail menu that “rekindles fables of the most infamous hotel hedonism and debauchery”.
Adjacent to this, the brothers are developing the Cowgate Market – a 70-cover restaurant and bar that will specialise in cocktails, late night food, live music and DJs.
The move comes after BXTR followed their hostel with a 105-bedroom Kip Hotel in East London. Both venues “continue to see above-market occupancy rates, which is why Mike and Ross have decided to launch a new brand”. The aim is to have five House of Gods hotels by 2022 with 20 to 50 rooms each.
READ MORE: Outlander effect boosts Scotland's hotel sector
READ MORE: Travelodge set to open 11th Edinburgh hotel before Christmas
The Baxters said: “We’re extremely excited to be launching our new hotel, restaurant and bar concept, and feel this very popular area of Edinburgh will be the ideal location for both sites to thrive.”
Mike Baxter also said: “Who needs another vanilla hotel named after a rich guy’s wife?
“I’ve had the idea in my head for years and have been collecting interiors one by one ever since. From spending weekends on the road to individually collecting 20 antique Chiavari chairs before re-upholstering each in House of Hackney fabrics, to storing a freestanding nickel-plated bathtub in my loft for the past eight years, we’ve built this place with zero compromise.”
Mohith Sondhi, senior debt finance director at OakNorth Bank, said: “Over the last five years since the launch of their first project, the Baxter brothers have proven they can successfully operate both hotels and hostels with their [first two] sites experiencing above-market occupancy rates year round.
"Edinburgh is a city they know well, and the central location of the site will make it popular for tourists and locals alike. They have ambitious plans, so we look forward to supporting them as they continue to expand the brand across the UK.”
OakNorth’s first transaction in Scotland was announced last year – a £3m investment in Edinburgh-based property developer AMA Homes, helping it redevelop Belford House and Douglas House.