Katara Hospitality has acquired the Grosvenor House Hotel for an undisclosed sum, just over a year after it was acquired by Ashkenazy Acquisition.
The deal came as the Reuben Brothers bought a site in Soho to convert into a hotel, underscoring the continued popularity of the capital to investors.
The acquisition of the Grosvenor House brought Katara Hospitality’s portfolio of properties in operation or under development to 40 and marked the company’s third acquisition in London after The Savoy and the Adria Boutique Hotel.
The group, the hotel arm of Qatar Investment Authority, said that the announcement: “Further builds on Katara Hospitality’s vision for iconic properties in strategic markets to commit significant investment over the long term. Katara Hospitality’s vision is to build a portfolio of leading hotels in key destinations around the world. Grosvenor House is the ideal opportunity to expand the company’s footprint into the vibrant and exciting London market.”
Grosvenor House was once linked to Reuben Brothers, which held its debt when it was owned by Sahara Group. Despite the drawn-out process which led to its sale, the Reuben Brothers has held faith with the London hotel market, buying a series of properties in recent months.
Over the summer the group acquired the Curtain Hotel and Members Club in Shoreditch. The deal followed Reuben Brothers’ acquisition of 47,48, & 49-50 Poland Street in Soho from Shiva Hotels. The site had planning consent by Westminster for redevelopment into a hotel with seven floors. Shiva Hotels will operate the new hotel under a long lease.
Less than three minutes’ walk from the Poland Street site, the group has bought a two adjoining freehold buildings on Great Marlborough Street, with full planning consent for demolition and redevelopment into a 118-key hotel with retail, restaurant and bar area over two basement levels, ground and seven upper floors.
Jonathan Goldman, SVP, Hotels and Hospitality, JLL said: “It is rare for a consented hotel development site of this type to become available in such a prime area of London. We were pleased to support Quadrum Global through this sale which is another example of the current strength of the London hotel market.”
The Reuben Brothers has also been tipped for a possible bid for Belmond.
London’s luxury market has also attracted investors from Japan, with the acquisition of the Arch London by StayWell Holdings and its parent company Prince Hotels for an undisclosed sum. The 82-room hotel will become the first property globally to operate under the Prince Akatori brand, announced by StayWell Holdings in June.
StayWell said that demand for luxury hotels in London remained strong. Simon Wan, president & director of StayWell Holdings said: “Demand in the London hotel market is strong and resilient, however with a shortage of supply, and existing properties being tightly held, it is increasingly difficult for new brands to penetrate the market.
“The Prince Akatoki in London will see travellers experience luxury services and amenities that reflect key elements of the unique, refined Japanese hospitality and culture – all while visiting one of the busiest cities in the world. Our vision is to bring an authentic, luxurious experience to people when they are travelling to international destinations outside of Japan.”
According to CBRE Hotels, the existing London five-star supply was 18,541 keys (106 hotels, with the five-star confirmed pipeline (final planning, in construction) of 1,621 keys, or 18 projects. This would result in a 8.7% increase in London’s five-star room supply in the next three years.
Joe Stather, associate director, CBRE Hotels, told us: “If you look at performance, it’s a 80% occupancy so there are still nights of the week when demand is displaced. Another challenge will come as we look at how to staff these hotels. But if you look at the KPIs in London, I don’t see why it can’t take more hotels across the sector. The new brands coming into the city are making the capital a more interesting place.”
In the Westminster pipeline, there were 10 five-star confirmed developments, of 976 keys, which would result in a 9.4% increase in Westminster’s five-star room supply in the next three years.
STR reported that preliminary data for London, October indicated significant performance levels and growth. The company reported a 1.7% increase in supply, an 8.5% rise in demand, with occupancy increasing by 6.7% to 89.1%, driven by a 6.2% rise in GBP160.13, leading a 13.4% expansion of revpar to GBP142.73.
STR said: “The absolute occupancy and revpar levels were the highest for any October in STR’s London database. STR analysts believe that three consecutive weeks with NFL games at Wembley Stadium contributed to London’s October performance.”
HA Perspective [by Katherine Doggrell]: Demand for London is sufficiently high that the likes of Reuben Brothers is willing to go through the thankless task of building its own hotels. It is no great wonder that a site with planning included was snapped up and with another property around the corner, surely there are savings to be had on builders’ lunches if nothing else?
Despite the growth in supply, at the top end there are plenty of rich folk to fill those and future beds, with the prospect of a no-deal Brexit pulling the pound down by 10% only likely to lure more travellers in.
As we saw elsewhere this week with The Dedica Anthology, luxury is undergoing a reworking in much the same way as the rest of the sector is, with ‘what is luxury’ meaning different things to different people. As such, although London appears to be well stocked with gold and marble-filled properties, constant revision is required to match up to the climbing demands of guests. As yet, these demands do not appear to be making developers blanch (and the added spice of ego which comes with hotels will hide this for a while). Only when they do could we see supply subside.