National Report – Oil prices might be plummeting, but the appetite for high-end lodging appears to be gushing as developers hunt for projects.
The latest case comes from London, where the Old War Office, the very place that Winston Churchill planned Allied strategies during World War II, was recently sold to India-based Hinduja Group in partnership with Spanish group Obrascon Huarte Lain Desarrollos, for a reported £300 million, or around $470 million. The group’s plan is to convert the historical building into a luxury hotel.
Of the sale, Defense Secretary Michael Fallon said: “The building played an important part in our country’s history and now presents a unique redevelopment opportunity in the heart of Westminster. The purchaser will be granted a 250-year lease to ensure that the heritage and security of the building is well managed.”
When completed, the total redevelopment will reportedly be valued in excess of $2 billion.
WANDA GROUP ACCELERATES
Not all the luxury moves are taking place in Europe. There’s also China, where, according to reports, the Dalian Wanda Group is accelerating the expansion of its luxury hotel business, “with plans to become the world’s largest five-star hotel owner in 2015.”
The company’s hospitality subsidiary, Wanda Hotels & Resorts, will build new hotels in 100 key Chinese cities and tourism destinations. And by the end of 2018, the company plans to own more than 150 luxury hotels in China, Europe, the U.S. and Australia.
NOT ALL ROSY
While luxury hotel growth continues throughout the world, there is one place where there are concerns of over development of luxury: Dubai. So, the logical response by Dubai’s government: build more affordable hotels.
Recently, it was reported that a company owned by Dubai’s government plans to open hotels in the emirate next year to expand the supply of mid-priced rooms.
Wasl Asset Management’s Hesham Abdullah Al Qassim said the three-star, 150- to 200-room properties will be managed by Hilton Worldwide and Hyatt Hotels. Wasl plans to build 19 hotels before the end of 2017.
“We want to fill the gap,” Al Qassim said. “If you look at what’s available in the market, you’ll find that more than 50 percent are five-star hotels. This isn’t healthy.”