TSH has agreed to a €145 million social and environmental impact finance deal with UniCredit for the development of two new facilities in Rome San Lorenzo and Florence Belfiore. SACE, a financial insurance organisation specialising in helping businesses and the Italian economy grow and develop through a variety of instruments and solutions, is backing the finance with a €54 million green guarantee.
The loan includes provisions requiring both locations to obtain a BREEAM “Very Good” rating and adherence to the EU Taxonomy for sustainable activities as criteria for SACE’s green guarantee.
TSH and UniCredit have agreed to include impact financing terms in the form of an interest rate discount, which TSH has promised to reinvest by giving scholarships in the form of rent discounts to students from low-income backgrounds.
The terms of the impact funding align with the bank’s Social Impact Banking initiative. UniCredit is the Arranger, Underwriter, Bookrunner, and Agent for the project. TSH and UniCredit previously agreed on a loan for hybrid hospitality model facilities in Florence Lavagnini, Bologna, and Vienna.
Redevelopment of San Lorenzo and Belfiore
The initiatives will help to revitalise Rome’s San Lorenzo district and Florence’s Belfiore district, improving the areas for local residents and increasing the availability of student housing in both cities. TSH will now have a total of five sites in Italy with the addition of these two new facilities.
Charlie MacGregor, founder and CEO of TSH, said: “We are very pleased to announce a social and environmental impact financing agreement with UniCredit, further strengthening our relationship that was established in 2016, and with support from SACE. The sustainable and impact finance terms align with TSH’s continued commitment to minimize our environmental impact and maximize our impact on local communities as part of our growth strategy. We are proud to be able to redevelop these previously underdeveloped areas in Rome and Florence to become exciting locations where the local communities, guests, students, companies can come together.”
The Rome development will officially begin construction in March 2022. TSH plans to open the 396-room hotel in winter 2023/24, with a floor area of about 22,750 m2 and a total investment of over €90 million. A restaurant, a bar, meeting and co-working spaces, and a gym will be available, as well as a public park of about 15.000 m2 that will be open to the public.
The project in Florence includes a 550-room hotel with a floor area of nearly 80,000 m2. The above-ground portion of the project began in September 2021, and the hotel is planned to open by the summer of 2024. TSH is putting €160 million into the project. In addition to hotel rooms, a bar, a gym, co-working spaces, and a public park, the Belfiore location will feature a public jogging track on the building’s rooftop.
Amber Westerborg, TSH Director of Sustainability & Impact, said: “At TSH, we’re continuously working on creating inclusive and impactful communities, in a sustainable manner. This agreement with UniCredit and SACE allows us to offer students from a disadvantaged socio-economic background rent reductions at our locations during their time at university and lays a foundation upon which they can start building their future. The agreement also recognises our philosophy to create futureproof projects that are sustainably developed and operated.”
Massimiliano Mastalia, Head of Corporate Italy at UniCredit, said: “We are proud to continue supporting TSH Group alongside SACE in its development. This is a longstanding relationship that will now allow for the transformation of two large areas in Rome and Florence into innovation and creativity hubs, aimed at connecting different communities of people, especially the youth. This will also increase the availability of quality accommodation, supporting a sector that was harshly hit by the pandemic. The deal is testament to UniCredit’s commitment to promote and support the sustainable development of our territories, which is central to our Group’s core purpose of empowering our communities to progress”.
Ensure long-term, sustainable growth
TSH’s growth strategy includes plans to open 10 hotels around Europe by 2025, bringing the total number of operational hotels to 25. TSH just raised €300 million from existing shareholders to help support its expansion plans. TSH was able to continue investing in expansion despite the pandemic’s problems, outperforming the traditional hospitality sector thanks to its hybrid hospitality approach. It plans to open hotels in Madrid, Barcelona, and Toulouse by 2022.
The financing arrangements fit within the goals of the Green New Deal, a strategy that supports a circular, contemporary, sustainable, and resilient Europe, thanks to the positive impact on climate change mitigation. SACE, the Italian agency that supports the growth of the country’s system, is a key player in the Green New Deal’s implementation. Indeed, the company led by Pierfrancesco Latini can provide green guarantees on domestic projects aimed at easing the transition to a more environmentally friendly economy by integrating production cycles with low-emission technologies for the production of sustainable goods and services, as well as promoting initiatives aimed at developing new mobility with lower polluting emissions.