Chinese investor acquires London's South Place Hotel

Cross-border investment into London's hospitality sector is alive and flowing. According to the UK's Caterer, the 80-room South Place Hotel, at 3 South Place in London, between London’s Liverpool Street and Moorgate, has reportedly been sold by owner Frogmore to Tian An China Investments Company for £67 million, or £837,000 per key, which is quite a high valuation for an unbranded hotel.

It is the first hotel from restaurateurs, D&D London, and is highly touted for its location, according to its website: "We’re located at the cross section of some of London’s most dynamic neighbourhoods with both the fast moving financial metropolis of the Square Mile and the super-hip East End.”

According to its website, Tian An China Investments is a Hong Kong-based investment holding company, with its subsidiaries, associates and joint ventures investing in the People's Republic of China. The group is engaged principally in the development of apartments, villas, office buildings and commercial properties, property investment and property management in China.

D&D will reportedly continue to operate the hotel under the new ownership.

Though Frogmore did not release details on the deal, CBRE Hotels, which marketed the hotel, made the point that London remained appealing for international buyers; this is especially true for flight capital seeking the safety that investments in the UK and places like the U.S. provide. 

“In this low-interest-rate environment, the allocation of hotel real estate within investment portfolios continues to remain attractive to investors, given the enticing risk-adjusted returns and ability to appropriately match long-term liabilities with long-term investments," said CBRE Hotels director Marc Nelson. 

Frogmore chief executive Jo Allen told The Caterer that "the deal concluded the firm’s interest in the development of the site, which was originally intended for office use."

She added: “We were delighted to work with Gerard Nolan & Partners on a pre-letting of the hotel to D&D, followed by securing planning consent, undertaking construction and watching the hotel revenue grow and stabilise. Frogmore wishes the new owner and D&D every success with the ongoing venture.