London sees strong hotel investment increase

 

Earlier this week, we noted that London is seeing a significant increase in its hotel investment market. According to Jones Lang LaSalle, the city saw a 155-percent increase in investment during the first quarter of the year compared to the same time last year, coupled with a 33-percent rise in Asian investment into the city, with private equity firms making up over a quarter of the investment total.

Total investment in the London market for this quarter stood at £527.8 million, up by 8 percent from Q4 2013 and 155 percent from Q1 2013 when it stood at £207.2 million.

Significantly, the highest jump in terms of source of investment money came from Asian buyers, rising from 0 percent to 33 percent between two quarters. There was also a 5 percent increase from Middle Eastern markets.

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In April, Chow Tai Fook Group purchased the 237-room Marriott London Grosvenor Square Hotel in central London for $207.92 million.

The deal works out to $877,000 for each room, making it the second-most expensive hotel deal in London this year in terms of price per room. New York-listed Strategic Hotels & Resorts announced it had sold the hotel to an affiliate of Hong Kong-based private equity firm Joint Treasure International.

Just this past week, Nobu Hospitality announced plans to open a hotel in the London area of Shoreditch. The hotel group, which is co-owned by celebrity chef and restaurateur Nobuyuki ‘Nobu’ Matsuhisa, actor Robert De Niro and film producer Meir Teper, announced the London hotel will be its entry into Europe and will open in the first quarter of 2016.

Intercontinental Hotels Group, meanwhile, announced that it plans to open two hotels in the city. The Hotel Indigo London - Barbican will open in 2016, while Holiday Inn - Watford Junction is due to open this summer. As a result of these future openings, IHG has in the last nine months signed all six of its current European brands in the Greater London area.

And in March, asset management firm Dominvs Group acquired the site of the former Tower Bridge Magistrates Court and police station on London’s Tooley Street, and is set to convert the Grade II-listed property into a luxury 150-200 room hotel. Once completed, the hotel will be named Dominvs Tower Bridge.

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Thayer Ventures led the investment, with Tiger Global, JLL Spark and Ashton Kutcher and Guy Oseary’s Sound Ventures among the others.

Formerly Driftwood Acquisitions & Development, Driftwood Capital has secured new capital allowing $3 billion in deployments over five years.

Easyhotel said that it would focus on France and Spain as part of its “ambitious strategy” for growth.