Historic five-star hotel in Scottish beauty spot to share in bumper £40 million investment

A landmark five-star hotel in the heart of Perthshire is one of several establishments set for major investment and upgrading.

Baronial Fonab Castle, which sits on the banks of the River Tummel in Pitlochry, is among the hotels being refinanced after a £40 million funding deal involving Crerar Hotels and banking giant HSBC UK.

Owned by private funds managed by London-based investment manager Blantyre Capital, Crerar Hotels operates a collection of four and five-star boutique hotels and spas in some of the most sought-after locations throughout Scotland, including the Isle of Mull, Balmoral, Loch Fyne and Glencoe.

The Fonab Castle hotel is located on the banks of the River Tummel in Pitlochry. Picture: Deloitte Debt & Capital Advisory

Crerar Hotels has secured the funding with HSBC UK to refinance nine hotels in Scotland and one in the Lake District, including Fonab Castle and Dunkeld House Hotel. The refinancing will support the hotel group’s “long-term growth ambitions”. It will also be supplemented by additional, “targeted investment” from Blantyre funds for refurbishment and expansion.

The Blantyre funds have been investing in the portfolio since 2021, when Fonab Castle was acquired. This was followed by further acquisitions including that of a Crerar Hotels branded portfolio in 2023.

Chris Liddiard, relationship director for real estate finance at HSBC UK, said: “It has been a pleasure to work with Blantyre as they invest in upgrading the hotels, which are positioned in some of the most beautiful areas of Scotland. These upgrades are expected to draw in more visitors, and we are excited to be able to support the business through this significant period of growth.”

Johann Scheid, investment director at Blantyre, added: “This deal represents an exciting new chapter for Crerar Hotels. We thank HSBC UK for their support in enhancing the long-term growth prospects of the company, and look forward to continuing to work together.”

Fonab Castle was built in 1892 for Lieutenant Colonel George Glas Sandeman, and is now a Category B listed building. It lay empty for many years, but is now a luxury five-star hotel, set in some 11 acres. The hotel has a fine-dining restaurant and more than 40 guest bedrooms.

Review: Fonab Castle Hotel, Pitlochry, Perthshire - Scotland on Sunday Travel