LONDON—The £470-million (US$733-million) deal for London’s iconic Grosvenor House, A JW Marriott Hotel, sets the bar for European hotel transactions, according to CB Richard Ellis Hotels.
“Nothing comes close in Europe,” said Simon Johnson, director of CB Richard Ellis Hotels London, who worked on the transaction on behalf of the seller, The Royal Bank of Scotland Group plc.
Indeed, the 494-room hotel with 4,000 square meters of meeting space, including the famous Great Room banquet hall, commanded a price that acknowledged the hotel and banqueting businesses. Johnson also said there are several undeveloped areas of the property, which could be potential revenue opportunities: a leisure club in the basement and additional unused space within the hotel that presents the new owner, Sahara India Pariwar, with some upside.
The sale, which has been reported as an all-cash deal, represents Sahara’s increasing interest in hospitality outside of its home turf.
"This acquisition is a part of the major expansion plans of the group,” said Subrata Roy Sahara, managing worker and chairman, Sahara Group, in a news release. “In addition to the acquisition of Grosvenor House, London will be the gateway for Sahara to introduce some of its new business ventures, internationally.”
Johnson said a long-term lease with Marriott International was a selling point, which also ruled out any other hotel brands from buying the asset.
“Marriott is the tenant, so we had to make sure any client that wanted to buy had to understand that; it had to be someone who was willing to work alongside Marriott,” he said.
The Grosvenor House was marketed for six months, and discussions with serious investors took another three months, Johnson said. The deal was announced by Sahara on 30 December.
Other recent big-ticket sales in London include:
• Sol Meliá’s September acquisition of the City Bank Building in London for the ME London hotel. The company paid €133 million (US$185.2 million) for the property and plans to invest another €52 million (US$72 million) to finish construction and purchase furniture, fixtures and equipment. It acquired the property from Anida, a subsidiary of the BBVA bank.
• Marriott International acquired the historic Berners Hotel in November, which will be renovated during the next 18 to 24 months to become The London EDITION.
• In July, Host Hotels & Resorts acquired the 266-room Le Méridien Piccadilly in London at a purchase price of £64 million (US$99.7 million), including the assumption of a £33-million (US$51.4-million) mortgage.