A £750,000 loan has been approved for a project to convert two upper floors of Newport's Clarence House into hotel accommodation and make improvements to the building.

Newport council has secured £1 million of Welsh Government repayable funding to support regeneration projects for vacant and under-used sites across the city.

Council leader, Cllr Jane Mudd, has now approved awarding £750,000 from the fund for a proposal by Nine Hills, the owners of Clarence House, to convert two vacant upper floors of the 11-storey office building into 28 apart-hotel rooms

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"Thanks to funding from the Welsh Government, I’m pleased that we are able to offer this loan to Nine Hills for the further development of Clarence House," Cllr Mudd said.

"As well as the expansion of the successful apart hotel, the scheme will include the much-needed improvement of the external façade of this prominent building.

"We have long recognised that this area needs regeneration and, with some other projects in the pipeline for Clarence Place, this is another boost for that ambition."

Under the plans, floors eight and 10 of the building in Clarence Place will each be converted to provide 14 apart-hotel rooms containing a bathroom, an open plan kitchen and living area.

Planning permission has already been secured to convert one of the two floors.

The loan will be repaid over 36-months, with an administration fee of 3.5 per cent which will provide the council income to support regeneration projects in the city centre.

The developer is also investing £50,000 of its own money in the refurbishment project and is expecting it to take 16-months to complete.

It is proposed that the two floors will be leased to Gateway Apartments, which currently already has a 10-year lease of the ninth floor where rooms have been refurbished and converted into 14 short stay apart-hotel rooms.

The scheme will also create jobs and provide “much needed bed spaces” to support the new International Convention Centre Wales, a council report says.

Welsh Government funding has been made available to Newport council for a 15-year period, with the authority required to pay it back by 2034.

A council report says the building is currently "tired looking" and "does not create a positive first impression to anyone arriving in the city."

"Funding provides an opportunity to upgrade a prominent city centre building,” it adds.

"The property is located alongside the main rail routes in to the city, and is therefore one of the first key buildings visible to visitors."