Norlake Hospitality, the lifestyle hotel and restaurant investment group, has sold Hoxton Southwark, a central London hotel scheme, as the capital sees a notable rebound in large-ticket single asset sales.
It is understood that Gibraltar-based real estate investment fund Yellow Tree, which has hotels in the UK, Europe and the US, bought the 192-key scheme for £150 million. CoStar News has approached the buyer to confirm the purchase price.
The sale follows news of another large, London hotel scheme which is set to transact, with Green Street News reporting in August that Ares Management has agreed to sell Novotel Hammersmith for £160 million.
That hotel is set to be purchased by Arora Group. It is part of a portfolio Ares bought from British REIT Landsec for around £400 million last year.
Hoxton Southwark is on the south side of the River Thames on the Blackfriars Road. The hotel is close to local attractions such as the Tate Modern museum, the IMAX theatre and the London Eye. It will continue to be managed by global hospitality company Ennismore.
The deal marks another large disposal by Norlake Hospitality Group, which in 2023 sold two Hoxton hotels to European hotel investment vehicle Archer Hotel Capital – the 210-room Hoxton Shoreditch and the 220-room Hoxton Holborn. It is understood the buyer paid around £215 million for the pair.
Yellow Tree, founded in 2018, has a property asset management portfolio of circa 2 million square feet and has a "buy-and-hold" strategy, focused on high-quality properties in prime locations, according to its website.
CoStar director of hospitality analytics Cristina Balekjian suggests the London hotel market has endured greater challenges than its regional counterparts over the last eight months given softer international tourism, with the American market, in particular, feeling the impact from a weaker dollar.
She adds that the pound’s appreciation against the dollar has made UK stays more expensive for Americans, limiting hotels’ ability to grow rates as local currency rates stagnate or decline, while in dollar terms, it continues on an upward trajectory.
Balekjan added: "The return of larger single-asset deals, above £100 million, signals a positive movement in the London hotel investment market, which has been somewhat quiet in recent months. London hotels have faced some challenges this year, given macroeconomic factors globally, but they remain high on investors’ agendas, as the capital offers long-term prospects due to its global positioning."
Norlake Hospitality is owned by Bhatia Enterprises and Ennismore founder Sharan Pasricha. Ennismore was also approached for comment.
