City Marque, the London luxury serviced apartments operator, has secured investment worth £2.1 million through Santander’s Breakthrough programme, to finance the next phase of its expansion.
Founded in 2009, City Marque offers an attractive and competitive alternative to London’s luxury hotels. The company provides high-end accommodation through apartments in cluster locations across central London. The company leases its apartments from property investors and developers, delivering stable performance from its portfolio, with all apartments contributing to profitability. It has a high level of advanced bookings and a cash flow model that sees more than 95 per cent of bookings paid in full prior to arrival with less than one per cent cancellations.
City Marque’s customer base comprises predominantly tourists on leisure visits to London with growing revenues derived from corporate business accounts. In five years, City Marque has grown to a business with revenue of £5.7 million for the financial year ending March 2014.
Expanding its presence
The £2.1m funding from Santander’s Breakthrough programme will help the company expand its presence across central London to 500 apartments over the next three years. The company plans to develop its e-commerce and systems infrastructure and build a corporate portal business.
Santander’s funding package includes £1.5 million Growth Capital investment, which is provided on a cashflow basis – rather than more limited asset-backed financing.
The Growth Capital loan is part of Santander’s Breakthrough programme which supports high-growth small businesses in accelerating their growth plans. As well as funding, Breakthrough offers companies access to trade missions, business master classes, networking events and support in areas such as finance and marketing.
Growing consumer base
Derek Gallimore, Managing Director and Founder of City Marque, said: “This is an exciting time for City Marque as e-commerce allows us to access a growing consumer base seeking the greater space and comfort of serviced apartments over hotels. Our growing presence in the London market means we can take on more strategic blocks in collaboration with institutional property investors and landlords. This long-term commitment of funding from Santander will provide confidence to our partners and help us secure a better pipeline of stock on attractive commercial terms.
“We are now accelerating our business plan without relying on equity investment. Our model is based on providing comfortable and reliable serviced apartment accommodation to visitors to the capital – this funding will allow us to enhance our e-commerce and mobile platform and secure better pipeline, on better terms and at an earlier stage than previously because of our size.”
Stable and scalable business
Darren Hart, Head of Growth Capital at Santander UK, said: “City Marque has a high level of advanced bookings and a cash flow model that sees over 95 per cent of bookings paid in full prior to arrival. We see this is a stable and scalable business that will visibly benefit from Breakthrough Capital in a short amount of time. The serviced apartment sector is a sub-division of the hotels industry – an area currently experiencing high growth as market awareness amongst online travel agents increases. We are looking forward to working with Derek to ensure his yearly business targets are met.”
About the Breakthrough programme
The Breakthrough programme is aimed at businesses with a turnover of between £500,000 and £25 million per annum with demonstrable growth in turnover, profit or employment. Breakthrough aims to help these businesses fulfil their growth potential to create jobs and stimulate supply-chain demand and a private sector led recovery via a programme of both capital and support. Breakthrough is part of Santander Corporate & Commercial.
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