(This story has been updated on 26 June to include a quote from Dominus confirming it has exchanged and focusing on its plans.)
Real estate group Dominus has exchanged to buy a City offices site, fighting off strong competition, to redevelop it as a hotel, CoStar News can reveal.
The number of bidders underlines strong investor demand for value-add sales in the capital. Market sources suggested there had been more than 20 for 5-10 Great Tower Street, from a mix of parties either looking to refurbish the offices, or for alternative uses including hotels and student homes. Budget hotels group Premier Inn is also understood to have bid.
Cushman & Wakefield is selling the site on behalf of Parco, which is understood to be a Natwest bank fund. It had been seeking more than £15 million or a capital value of £269 per square feet, but it is understood that the strong bidding pushed pricing to more than £25 million.
Dominus, which is being advised by CBRE, launched in 2011 and quickly built a hotels portfolio across the UK. It has recently expanded into residential, student homes and mixed-use development.
The sale comes as the City of London has indicated it may relax the Square Mile's strict planning requirements that protects existing offices to encourage alternative uses for secondary buildings increasingly at risk of obsolescence.
The review is part of a look at the City Corporation's City Plan and how it responds to the changing office market through to 2040. A meeting of the Corporation's Local Plans sub-committee on Tuesday will consider recommendations made by the Future of Office 2023 report.
Preet Ahluwalia, principal director of Dominus, said in a statement: “We are excited to have exchanged contracts within three working days of receiving heads of terms on this very exciting opportunity.
“We believe that 5-10 Great Tower Street will be an excellent addition to our growing portfolio of hotels in London and core regional cities.
“We continue to have ambitious growth plans in both the hospitality and living sectors and are well capitalised with our own equity, in addition to exploring partnership joint ventures, to acquire further opportunities in the second half of this year.”