OakNorth and REL Finance deliver £48m loan for City of London office-to-hotel conversion

March 23, 2026

Transaction overview

OakNorth and REL Finance provided a £48m facility to support JMK Group's acquisition of Peninsular House, a prominent office building in the City of London.

The business plan is to reposition the office asset into a 260-key hotel, subject to planning. The facility gives the sponsor the capital base to move through acquisition, planning and early delivery work with a clear funding structure in place.

For a transaction of this nature, funding certainty is important because the sponsor needs to complete the acquisition while also preserving momentum around planning, design, professional team appointments and early operational planning.

Why the asset needed tailored capital

Office-to-hotel conversion strategies require a lender to underwrite more than the existing building. The debt structure has to consider location, alternative-use potential, the planning pathway, sponsor capability and the timetable for moving from ownership to delivery.

The City of London location is central to the opportunity. A well-connected office asset can support a hospitality-led repositioning when there is depth of demand from corporate, leisure and event-led visitors, but the plan still requires practical funding that can absorb the complexity of transition.

Sponsor and structure

JMK Group is an experienced hospitality operator with a track record across London and Ireland. The transaction reflects its continued focus on well-located hospitality-led assets in areas with strong business and leisure demand.

The loan was structured as a double co-lend between OakNorth and REL Finance, pairing bank lending with REL Finance's private-capital, relationship-led approach to UK real estate funding.

That partnership structure allowed the lenders to support a larger facility while retaining close engagement with the sponsor. REL Finance's role centred on commercial underwriting, speed of execution and a direct understanding of the asset strategy.

Execution considerations

The transaction required a funding partner comfortable with acquisition risk, planning-led value creation and a sponsor-led operating plan. REL Finance assessed the deal around the quality of the location, the strength of the borrower, the intended hotel use and the route to exit.

In practical terms, the facility gives the borrower time to move through the next stages of the business plan without relying on a rigid, one-size-fits-all lending structure. That is particularly valuable where the asset's value is linked to repositioning rather than simply holding the existing use.

Why it matters

For REL Finance, the deal demonstrates the ability to work alongside institutional lending partners and repeat sponsors on larger, more complex property repositioning opportunities.

The transaction also sits squarely within REL Finance's approach: direct decision-making, flexible structuring and close engagement with sponsors where certainty of execution is central to the business plan.

The co-lend also shows how REL Finance can complement a banking partner. Borrowers with complex assets often need more than price; they need lenders who understand the moving pieces and can stay aligned with the commercial logic of the plan.

Borrower takeaways

This case study is relevant for sponsors acquiring assets with a clear value-add or change-of-use strategy. REL Finance can consider short term facilities where the exit is expected to come through sale, refinance, stabilisation or progression to the next funding stage.

Where a borrower has a proven track record and a well-considered plan, REL Finance is able to evaluate the transaction on its own merits and structure capital around the real timing and risks of the opportunity.

This REL Finance article provides an on-site transaction summary and added context for borrowers and advisers considering similar UK real estate funding requirements.