Owners behind Virgin Hotels Glasgow building are developers for neighbouring hotel

The fate of a second landmark hotel development in the city centre is in the hands of the same two company directors responsible for the opening and sudden closure of Virgin Hotels Glasgow. The company that owned and operated the Virgin hotel was placed into liquidation last month with staff finding out they had lost their jobs in the week before Christmas.

Motto by Hilton Glasgow has a planned opening of autumn 2024, an 186-room hotel being built by Silk Property Group. The developers are Richard Diamond and Rishipal Singh, the two London based businessman behind a series of interconnected companies that own a strategically important section of Clyde Street, including two existing buildings and one construction site.

The company that owned the Virgin Hotel building was part of a limited liability partnership of four designated members - Richard Diamond and Rishipal Singh alongside Lloyds Development Ltd with a registered address in Guernsey and Moreply Ltd, registered in London. Lloyds Development Ltd was placed into administration on 30 November 2023 with Blair Nimmo and Geoff Jacobs of Interpath Advisory appointed on 1 December 2023 as Insolvency Practitioners. It emerged during the course of the shock closure of the hotel after four months of operating that the staff were employed by V Hotels Glasgow, a company with two directors, Rishipal Singh and Richard Diamond. That company was placed into liquidation, last week we revealed that local musicians were owed £15,000 in fees by the business. The liquidator has subsequently written to all creditors stating that they do not expect to have any funds to distribute to cover debts from the collapse of the company.

When staff of Virgin Hotels Glasgow were told they had lost their jobs at a morning meeting and then escorted out of the building, employees of Silk Property Group from the neighbouring building site were there to supervise. Another company with the same directors, Silk Contracts Limited, was involved with construction related contracts during the development of the Virgin hotel.

Silk Property Group was listed as the developer of Virgins Hotels Glasgow when the project was announced in 2021, at some point the building was transferred to Lloyds Development Ltd, the liquidator of that company was unable to provide a date for this transaction. The building had been originally intended as student accommodation but was acquired for a hotel development with new plans designed by 21st Architecture Ltd - their company secretary is Richard Diamond.

Permission was granted for the 17-storey building on Clyde Street to be used as a 290-bedroom hotel instead of student accommodation in 2018. Plans were then submitted for the neighbouring premises - Riverside House at 260 Clyde Street, currently operating as student accommodation - to provide a gym, cafe and meeting rooms for the hotel with a whisky bar and links between the two buildings at ground floor level. This section of the hotel, alongside the upper floors, was not completed before Virgin Hotels Glasgow opened. The land registry shows that Richard Diamond and Rishipal Singh own Riverside House, adding a further layer of complications to the prospect of a new owner being able to reopen as a Virgin Hotel without the planned amenities in the neighbouring building.

Motto by Hilton Glasgow is being built by Diamond and Singh's property company on a gap site beside the building they operated as a Virgin hotel for four months before liquidation proceedings. The development is part of Glasgow City Council's tourism development plan with 20 new hotels to be built by 2025. It would be the first hotel for the brand in the UK following it's European debut in Rotterdam. The hotel is part of a franchise agreement with Cycas Hospitality and is under the ownership of Silk Property Group.

Patrick Fitzgibbon, senior vice president, development, EMEA, Hilton, announced the development in November 2022, saying, “We are excited about the arrival of the Motto by Hilton brand in the UK. The hotel will cater to a range of guests, whether travelling for work or play, solo or in a group, with innovative new features such as multi-use group spaces and multiple connecting rooms. It will give guests the freedom and flexibility to customise their stay in this celebrated Scottish city – and will pave the way for future properties in the UK as we grow the Motto by Hilton brand into vibrant city locations.”

Rishi Singh for Silk Property Group said, “The forthcoming Motto by Hilton Glasgow is an incredibly exciting addition to the city. We’re delighted to be working on this project with the team at Cycas Hospitality, using their impressive experience as a pan-European hotel company to launch this new concept on the Scottish market.”

Plans state: "Motto by Hilton Glasgow will feature interiors influenced by distinctive Glaswegian architecture styles, including Art Noveau references and Mackintosh-inspired designs. Conveniently located in the heart of the city, the property overlooks the world-famous River Clyde."

Glasgow MSP Paul Sweeney reacted to the developments on Clyde Street saying: “The murky nature of the complex corporate structure behind the Virgin Hotel development on Clyde Street is quite concerning and highlights a major flaw in our planning system. Councils will simply assess planning applications at face value, without determining the financial viability of the development or the capacity of the applicant to deliver.

"This can often lead to destructive behaviour by speculators acquiring land and attempting to inflate and leverage its value by obtaining planning consents for projects they have no means of financing, before attempting to sell them on for an easy but ultimately unearned profit. Indeed the Virgin Hotel site was originally granted planning consent in 2008 with a high quality design by Gordon Murray & Alan Dunlop Architects before development stalled due to the financial crash.

“It was then restructured as student accommodation and the design substantially downgraded by London-based 21st Architecture, with clunky use of bronze anodised aluminium cladding panels replacing the delicate glazing of the original art deco-inspired design. The largely complete but derelict building then reverted to consent for hotel use in 2018, but this took a further five agonising years to bring to fruition, with the Virgin franchise deal being announced in March 2021. Now, just four months after opening, it has collapsed. There clear has been a serious failure of due diligence by Glasgow City Council licencing, planning and Virgin Hotels as the franchise partner.

“Given that the complex web of shell companies involved in this hotel all link back to the same directors, it certainly raises questions over the sustainability of the development of the neighbouring Hilton Motto hotel franchise on the corner of Clyde Street and Maxwell Street, which was the site of Typographical House, a former office of the Graphical Paper and Media Union. Planning permission for a hotel at the site was given in 2015 with an amended project approved in 2018. Construction work supposedly began in March this year after the deal with Hilton was announced in December 2022, but it has since made little progressT.”

The planning committee of Glasgow City Council and Leader of the Council Susan Aitken had no comment when asked if they had concerns regarding the ownership of the new hotel buiilding on Clyde Street in the aftermath of the closure and job losses at Virgin Hotels Glasgow.

Silk Property Group, Silk Contracts Ltd, Silk (Maxell Street) Ltd, Motto by Hilton and Cycas Hospitality have been approached for comment.