x Abu Dhabi, UAE Friday 21 July 2017

London hotels sold for £192m

Capital Hill Hotels, a Middle Eastern investor with other global holdings, is buying two luxury properties.

A Middle East investor is to buy two of London's luxury hotels for £192 million (Dh1.1 billion).

The trendy, modern properties are the Sanderson,near Oxford Street, and the St Martins Lane hotel in London's West End.

The deal follows the purchase last month of the W Hotel in Leicester Square in London by Qatar's Al Faisal Holding in a deal worth close to £200m.

Morgans Hotel Group, the operator and 50 per cent owner of the joint venture that owns the Sanderson and St Martins Lane hotels, announced the sale. Its partner in the venture is an affiliate of Walton Street Capital.

The buyer, Capital Hill Hotels, is described as a Middle Eastern investor with other global hotel holdings. The sale of the hotels is expected to be completed by the end of the year.

"The joint-venture partners will use the sales proceeds, along with cash in escrow, to retire the approximately £99.5m of outstanding mortgage debt, which is secured by the two hotels," Morgans Hotel Group said. "The joint venture partners received a £10m security deposit, which is non-refundable, except in the event of a default by the joint venture."

Jones Lang LaSalle Hotels in London confirmed it was advising on the sale. A "current lack of stock continues to drive competition for good-quality assets" in the UK capital, said Jones Lang LaSalle Hotels.

Morgans Hotel Group will continue to manage the hotels.

Investors from the region have been involved in a series of high-profile property deals in the London in the past couple of years.

London's Olympic Village was sold in a US$903m (Dh3.31bn) deal in August to Qatari Diar and the British developer Delancey, and last year, Qatar Holding bought the department store Harrods.

Jones Lang LaSalle this year predicted that sales of hotel properties around the world would increase by as much as 40 per cent to $30bn this year.

rbundhun@thenational.ae