When Sahara Grosvenor House Hospitality Limited paid a mammoth £470 million for the Grosvenor House Hotel back in 2010, it set a new record for the London hotel market and indicated that foreign investment into the capital was on the rise. However, it seems that this record may once again be broken, this time by the very same property, as the five star Park Lane hotel is back on the market with an estimated price tag of £500 million.
The reason for the sale is the owner’s administration, as the Sahara group defaulted on debts tied to the hotel earlier this week. Administrators from Deloitte, along with property experts Jones Lang LaSalle (JLL) will now seek a buyer for the property and are rumoured to have already approached a number of global investors from as many as 15 different countries regarding a potential deal.
Joint administrator and restructuring services partner at Deloitte, Phil Bowers, believes the hotel will attract a high level of interest thanks to the extremely buoyant London commercial property market.
He says; “Grosvenor House Hotel is an exceptional asset, at a London address recognised around the globe.
“We are in the process of agreeing a sale strategy with JLL as sales agent and expect there to be considerable interest in acquiring this building.”
The Grosvenor House Hotel boasts a total of 420 bedrooms, along with 74 suites and is currently operated by Marriott in an underlying lease agreement – something which is not expected to be affected by Sahara’s administration. It also offers guests access to 27 meeting rooms and the largest five star ballroom in Europe, making it the ideal facility for business events in the UK’s booming capital city.
There is no denying that acquiring the Grosvenor House Hotel would be a feather in the cap of any hospitality portfolio, with its excellent Mayfair location and existing tie-in with Marriott making it a strong investment opportunity. JLL has forecast that global hotel transaction volumes will rise by 15 per cent this year to an eight year high, with this property set to become a major attribute in this boom.
Although no potential buyers have yet stepped forward, it is possible that one major party could be the Abu Dhabi Investment Authority (ADIA), the world’s second largest investment fund. The fund has apparently written to Cororin, the owner of Claridge’s, The Berkeley and The Connaught, with a view to purchasing these top London hotels for £1.6 billion, so the opportunity to snap up a fourth hotel in the capital may be too good an opportunity to be passed up.
Global chief executive at JLL, Mark Wynne-Smith, says; “The last hotel transaction on Park Lane took place two years ago and as the market has strengthened since then, we are looking forward to engaging with investors in an open marketing process.”
