Chewton Glen, Hampshire

What was the brief?

L+R required advice on a £49 million facility to refinance Chewton Glen Hotel & Spa, its landmark luxury country house hotel in Hampshire, operated by Iconic Hotels & Resorts.

Chewton Glen is a substantial and complex operational real estate asset, set within 130 acres of woodland, parkland and gardens on the edge of the New Forest. In addition to the core hotel and accommodation offering, the estate includes a luxury spa, nine-hole golf course, tennis courts, croquet lawn, treehouse suites and The Kitchen cookery school and event space.

The refinancing therefore required an approach which recognised that Chewton Glen is not simply a conventional real estate asset. The underlying property supports a sophisticated hospitality business with a range of interconnected accommodation, leisure, wellness and guest facilities. The transaction called for advisers who could understand that wider operational context while delivering the financing and real estate workstreams efficiently and cohesively.

Our role

We acted for L+R as borrower on the £49 million refinancing, providing an integrated service across the financing and real estate aspects of the transaction.

Our approach combined sophisticated real estate finance capability with deep hotel sector knowledge and specialist operational real estate expertise. This meant looking at the asset not simply through the separate lenses of finance and property, but understanding how the underlying real estate, the operation of the hotel and the financing fit together.

That sector understanding was particularly relevant to an asset such as Chewton Glen. The property encompasses a broad range of uses and facilities across a substantial estate, all of which form part of the wider hotel proposition. Our experience of operational real estate meant that we understood the commercial context in which those different elements operate and could approach the real estate workstream with the requirements of the financing and the continued operation of the hotel in mind.

A key strength of our involvement was the seamless integration between our finance and real estate lawyers. Rather than approaching the financing documentation and underlying property as separate workstreams, our teams worked together as a single transaction team. This allowed issues arising from the real estate to be considered in the context of the financing, and financing requirements to be approached with an understanding of the particular characteristics of the underlying operational asset.

For L+R, this provided a streamlined borrower-side service and a team able to engage with the transaction from both a financing and an asset perspective. It also allowed us to bring our wider understanding of the hotels and leisure sector to bear, recognising the commercial and operational considerations which distinguish the financing of hotels and other operational real estate from more conventional investment property.

The outcome

The refinancing provides L+R with a long-term financing solution to support continued investment and growth at Chewton Glen.

The transaction is a strong example of the way in which our multidisciplinary offering supports clients investing in and financing operational real estate. In this sector, understanding the financing structure is only part of the picture. An effective legal team also needs to understand the underlying asset, the way it is operated and the relationship between the real estate and the business carried on from it.