Talash Hotels Group has put a portfolio of nine hotels on the market with a guide price in excess of GBP29.5m.
News of the marketing came as Savills reported significant interest and purchasing activity by buyers from Asia Pacific in the first three quarters of the year.
Talash Hotels has bought a total of 661 rooms to market, including four sites under the Mercure brand and the group’s flagship hotel, the 97-bedroom Stoke Rochford Hall, near Grantham, Lincolnshire.
Following the disposal of the nine hotels, Talash will be left with three properties: Risley Hall hotel in Derbyshire, Mercure Telford Madeley Court and Mercure Wolverhampton Goldthorn.
Talash Hotels Group was launched in 2017 by brothers Sanjay and Ravi Kathuria, with hotels primarily featuring hotels in the Midlands and the north west of England. Speaking at the AHC in Manchester earlier this month, Ravi Kathuria said that the pair had been motivated by a desire to be close to their hotels, in markets familiar to them. They cast the net wider after employing a driver.
Ravi Kathuria, CEO, Talash Hotels, said: “The Talash hotel portfolio is a business that has been built up by myself and my brother Sanjay over the last 12 years and it has truly been a privilege to own such great hotels which have created an incredible journey.
“We have decided to continue to pursue our other business interests. Our hotels give an incoming buyer a value-add opportunity and are ready to be taken to the next platform to realise their full potential.”
Gavin Wright, director, JLL Hotels & Hospitality, which has been appointed to market the properties, added: “All nine properties provide an incoming purchaser a variety of asset management and significant value-add opportunities. With a value of circa GBP45,000 per bedroom for the portfolio we anticipate high levels of interest from a range of domestic and overseas investors.”
The marketing came as Savills reported that investors from the Asia Pacific continued to show an enthusiastic interest in the sector, despite reduced activity from some other international buyers.
Asia-Pacific buyers have been the most active overseas investors to date in 2019 spending a total of GBP1.08bn, representing 56.9% of total overseas activity. This was a tenfold increase compared to the volumes recorded over the same period in 2018. The volumes were at their highest for the first three quarters of the year since 2015 when transaction volumes reached GBP1.13bn. Hong Kong investors have been the most prolific spending a total of GBP947m to date this year (87.7% of total Asia Pacific volumes) making it the highest year on record in terms of hotel investment from Hong Kong buyers.
Investment into UK hotels has reached GBP3.22bn in the first three quarters of the year according to new research from Savills. Despite volumes being down c.44% on the same period last year, the numbers are up 11.3% against the 10-year average of GBP2.89bn.
This year has seen 97 deals take place according to the firm, a decrease of 49% from the 190 that took place in the same period in 2018. Despite this lack of deal count, there’s been continued interest in the sector from both domestic and overseas investors which accounted for GBP1.35bn and GBP1.87bn respectively.
Overseas investment accounted for GBP1.87bn of investment so far this year, exceeding the 10-year average of GBP1.4bn by 38%.
In terms of where capital is being spent, London attracted the most investment into the UK with GBP1.98bn spent in the capital.
Rob Stapleton, director in the hotels team at Savills, said: “Deal volume this year has undoubtedly been affected by global political uncertainty and wider global macro issues. The UK’s hotels are seen as a relative safe haven for overseas investors, illustrated by the rise in capital from Asia Pacific. We have seen a flight to quality with investors favouring London assets in particular.
“This trend is expected to continue and whilst the UK’s regional markets have seen lower transaction volumes so far this year, we expect the ripple-effect of historically low yields in London to encourage investors into the more stable regional markets in the search for yield. Volatility in the equity markets and the spread between gilts and equivalent hotel yields remain attractive however, and we expect investment into real estate, and in hotels in particular, to remain an attractive option for investors from across the globe.”
HA Perspective [by Katherine Doggrell]: This correspondent’s panel at The AHC served to confirm two things: deals in the UK are alive and well and this is in part because hotels are the “least worst” of the property sectors which can be invested in. Hurrah!
With interest rates now at the point where many in Europe are paying the bank rather than the other way around, investors must get returns from somewhere and hotels are piquing their interest. Whether this remains the case should others pick up or whether hotels are now established remains to be seen. For investors in locations such as Dubai, hotels in the UK are also better than their suffering domestic market. As for Hong Kong, the political situation tells a clear story. Throw in a Brexit discount and London’s hotel owners can almost name their price.