CONSTRUCTION of a £9.5-million Newquay hotel site redevelopment is due to get underway after funding was secured.

Cator Wells Finance, a specialist property finance brokerage, has successfully secured a £5.8-million loan for an experienced hotelier to knock down part of the former Glendorgal Hotel in Lusty Glaze Road and construct a “high-end” coastal residential scheme.

The development involves the conversion of the derelict hotel into five contemporary townhouses, alongside the construction of three detached cliff-edge luxury homes.

The scheme aims to deliver a boutique collection of premium coastal residences designed to appeal to lifestyle buyers and owner-occupiers once the development is complete.

The transaction reflects Cator Wells Finance’s relationship-led approach to property funding. The client Blue Chip Hotels Limited was first introduced to the firm in 2022 when Daniel Dawson, a director at Cator Wells Finance, met them while on holiday in Newquay. What began as an informal conversation developed into a long-term advisory relationship, supporting the client through early-stage planning, feasibility, and scheme preparation over several years.

A spokesperson for Cator Wells Finance said: “Rather than engaging only at the point of funding, Cator Wells Finance worked alongside the client throughout the project’s evolution, providing guidance on lender appetite, scheme structure, and fundability. This long-term involvement ensured the development was positioned effectively when it reached the funding stage.

“Coastal schemes combining conversion and new-build elements can present challenges for lenders due to construction complexity, location-specific risks, and exit considerations.

“Cator Wells Finance structured and presented the opportunity to accurately reflect the quality of the end product, the strength of the location, and the client’s experience, enabling a competitive funding solution to be secured.

“The £5.8-million facility provides the client with the certainty and flexibility required to move into the construction phase, supporting both the refurbishment of the existing structure and the delivery of the new cliff-edge homes.”

Daniel Dawson, the director of Cator Wells Finance, added: “This deal highlights the importance of long-term partnerships in development finance, with many projects requiring years of preparation before reaching execution. The firm continues to position itself as a trusted member of its clients’ professional “power team”, supporting schemes from concept through to completion.”

Andrew Beard, on behalf of Blue Chip Hotels Limited, stated in the planning application: “The site is a former hotel site, now not operating, which has adjacent holiday homes, but also includes an important headland area at the entrance to Porth beach.

“It is proposed to demolish most of the existing hotel, with a retained section adjacent neighbouring holiday dwellings to ensure protection when constructing.

“This also allows the new holiday dwellings to be moved back from the cliff improving openness and value of the headland from Porth and opposite.

“The existing villa will be demolished and replaced as an open market dwelling.

“The central Barrow is the most important feature of the site and is retained with the same conservation scheme to remove the loop road and complete landscaping restoration.

“This major conservation and landscape benefit is still the core priority of the redevelopment.

“There is now proposed two “sunken” holiday dwellings in the southern headland edge, which will not be visible from the headland opposite and have been relocated on the site to be where previous spoil has been situated and in response to the pre-application original concern.

“The hotel is currently not in operation following both Covid but also the failure of the previous developer to complete the contract following permission granted in May 2020.

“Prior to the last application significant investment was required in the hotel operation and the three years trading figures 2016-2019 showed the business making a continued loss.

“The previous trading indicated an occupancy rate of 50 to 60 per cent throughout the year and its operation and ongoing work to the buildings is also detrimental to the upkeep of the timeshare and self-catering holiday units to the rear of the site, which also need upgrading.

“Since 2020 apart from a brief period in 2023 the hotel has been closed.

“Market advice has concluded that the previous scheme did not meet the size demand for holiday accommodation, given the sites location and its suitability for family accommodation rather than smaller units.

“Given the previous scheme was unviable and the further dormant period the site is in danger of serious decay. Indeed, the main hotel internally has suffered from inactive sustained use.

“It is in the wider public interest to ensure that the site and headland is in good condition for ongoing environmental stewardship within an important and well-loved beach and headland.

“The priority is to deliver a viable scheme that can deliver the primary restoration of landscape and conversation of the Barrow and headland and coast with sensitive new build holiday let apartments and houses.”