NEWS

Paternoster House developer takes on Royal Clarence Hotel rebuild after sale agreement reached with previous owners

Completion of restoration plans for five floors of luxury flats above ground floor and basement commercial units scheduled for April 2027, more than decade after historic Cathedral Yard building burnt down.

Leigh Curtis with Martin Redfern

The Royal Clarence Hotel, which burnt down eight years ago, has been sold to London-based Nooko Developments Limited, which says it will “take forward” restoration plans agreed in August last year after a lengthy dispute over developer contributions.

The restoration plans for the historic Cathedral Yard building, which provide five floors of luxury flats above a ground floor bar and restaurant, do not include any affordable housing.

A sum of up to £2.175 million towards the provision of affordable housing elsewhere in Exeter was agreed during negotiations with the previous owner, alongside £13,500 for local GP surgeries and £22,500 for the Royal Devon NHS Trust.

But none of these sums will be finalised until three months after the hotel restoration is complete and will then be reviewed, based on final build costs and profit margins submitted by the developer, at which point a viability appraisal may conclude that none of the contributions are due after all.

Royal Clarence Hotel in September 2024 The remains of The Royal Clarence Hotel in September

Nooko Developments, which describes itself as a “visionary property development company”, says it will now address a series of pre-commencement conditions that are required by the planning consent granted in August 2023 before starting work on site in April next year.

It says it expects to complete the rebuild by April 2027.

The company is also responsible for the renovation of Paternoster House, overlooking the junction of Fore Street and North Street.

It describes its redevelopment as ground floor and basement commercial units with luxury flats above, which it is marketing for rent at up to £3,500 per month, as a “blueprint for Exeter’s future”.

Royal Clarence Hotel fire in October 2016 The Royal Clarence Hotel fire in October 2016. Photo: The Devon and Exeter Institution.

The Royal Clarence Hotel was built in the late 1760s on the site of several medieval buildings, parts of which were retained in its fabric. There is also evidence of Roman occupation at lower basement level.

It was initially known simply as “The Hotel”, and provided assembly rooms, a coffee house and a tavern before becoming a coaching inn. It became “The Cadogen Hotel” then “Thompsons”, then “Phillips Hotel”.

Its aristocratic renaming followed an 1827 visit by Adelaide, Duchess of Clarence, around which time it was partly remodelled to incorporate the former Exeter Bank building next door.

Other alterations followed. In 1953 it was added to what is now the National Heritage List for England as part of a group of important Cathedral Yard and Deanery Place buildings.

Local celebrity chef Michael Caines and Andrew Brownsword ran the hotel in partnership for fifteen years from 2000, launching a chain from the premises.

Andrew Brownsword Hotels still owned the building when a major fire that began in the adjoining 18 Cathedral Yard early on 28 October 2016 destroyed most of its interior and frontage.

Royal Clarence Hotel and adjacent buildings fire damage, October 2016 The Royal Clarence Hotel and adjacent buildings fire damage, October 2016. Photo: Exeter City Council.

In December 2017 the city council granted planning consent for the building’s partial demolition and reconstruction as a 74-bedroom hotel.

The reconstruction was expected to take eighteen months to complete, but the hotel was instead put up for sale in August 2019.

Accounts filed at Companies House say that insurers agreed a settlement of £22.3 million to compensate for losses following the fire in accordance with the complete impairment of all tangible fixed assets and the works required to protect and restore the site’s historic fabric.

At the time Andrew Brownsword said the cost of partial demolition, historic fabric recovery and redevelopment enabling works meant rebuilding to match his hotel group’s standards was not viable.

According to the Land Registry, South West Lifestyle Brands Limited, a company controlled by former Plymouth Argyle Football Club chairman James Brent and Nicola Brent, bought the hotel for £100,000 the following August.

The Royal Clarence Hotel Limited, a subsidiary of Andrew Brownsword Hotels, registered a charge against the property which refers to a clause in the unpublished sale contract on the same day.

(It also recorded a £10 million dividend payment to its parent at Companies House in January 2022.)

Royal Clarence Hotel 2022 restoration plans front elevation The Royal Clarence Hotel 2022 restoration plans front elevation. Source: Exeter City Council.

The city council planning committee then approved a second set of restoration plans for the derelict hotel in October 2022, this time as luxury flats above ground floor and basement commercial units.

Nine months before the committee met, the developer had provided a viability assessment which said the planned restoration would cost £14.3 million, including fees and financing costs, and so could not offer any health or affordable housing contributions to the council at all.

The council commissioned its own viability assessment in response. It broadly agreed that the 23 flats would sell for at least £13.8 million, following a Knight Frank market appraisal that was by then fifteen months old, but said some might fetch more, citing an “extremely active” property market.

It also broadly accepted the proposed residential build cost calculations but significantly reduced the costs associated with the ground floor and basement commercial units.

Having cut the restoration, fees and financing costs to a total of £9.1 million it projected a £3.2 million surplus from the project, all of which the council could seek to provide healthcare and affordable housing elsewhere in Exeter.

Unsurprisingly the developer disagreed, recalculating costs and margins to yield a surplus that was still too small to make any such contributions.

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A series of deadlines to sign a section 106 agreement requiring the £2.2 million developer contributions that the council ended up settling for were not met.

The agreement was eventually signed by South West Lifestyle Brands in August last year leaving room for the developer to pay no contributions at all, subject to post-construction viability appraisal.

Following the building’s sale to Nooko Developments, Akkeron Group, a trading name of Natatomisam Limited, one of 40 companies in which James Brent is also listed as having an interest at Companies House, will retain a long lease over the ground floor and basement commercial units.


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