Asset light? Hyatt rumored to have interest in London's Grosvenor House

In recent times, branded hotel companies, from Starwood Hotels & Resorts Worldwide to InterContinental Hotels Group, have followed divestment strategies to rid themselves of equity positions within real estate. The so-called "asset light" approach. But is this tactic slowly beginning to turn?

First, Accor came out, bucking the trend. Now, reportedly, Hyatt Hotels Corp. is in the market not to sell, but buy.

The Chicago-based hotel group is reportedly considering purchasing the Grosvenor House Hotel in London, after the landmark building was put up for sale earlier this month, with a reported asking price of £500 million.

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The sale process was triggered after the property's owner, Sahara Grosvenor House Hospitality, failed to pay debts on it. Property agent JLL, appointed by administrator Deloitte, is marketing the 494-room property.

"The last hotel transaction on Park Lane took place two years ago and as the market has strengthened since then, we are looking forward to engaging with investors in an open marketing process," said Mark Wynne-Smith global chief executive at JLL's Hotels and hospitality group.

Hyatt's SVP for acquisitions and development for EMEA told City A.M. this: "We will take a look at the Grosvenor as we look at all potential sites. But I won’t know until I see the information whether it will work for us."

As C&IT reported, a spokeswoman for Hyatt said the company was unable to comment on this or any of its other commercial plans. She added: "Hyatt is currently focussed on careful expansion in European gateway cities and hopes to open a Park Hyatt in London in the future. Hyatt is always actively looking at potential properties across the continent - London is just one of many locations of interest."

Hyatt also owns the Andaz at Liverpool Street Station and the Hyatt Regency off Bond Street in London.

Whether or not Hyatt acquires the hotel is not the real story; rather, it's if branded hotel companies are back in the market to use their balance sheets to acquire assets, not sell them. As the health of the hotel industry continues to get better, and rates rise, there could be a spate of these types of deals, particularly in high-barrier-to-entry markets, such as London.

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