PPHE Hotel Group sells Park Plaza London Waterloo hotel to CBRE Global Investors

A subsidiary of Amsterdam's PPHE Hotel Group has signed a deal to sell and leaseback the just-opened Park Plaza London Waterloo hotel. 
A unit trust created on behalf of several clients of CBRE Global Investors is reportedly purchasing the hotel for £161.5 million, subject to a sale and a 199-year leaseback. The trust will pay an initial rent of £5.6 million per year, with annual inflation adjustments subject to a cap and a collar.  

"This sale and leaseback will unlock the capital invested in Park Plaza London Waterloo whilst allowing us to continue to benefit from the operation and associated profits," Boris Ivesha, president and CEO of PPHE Hotel Group, said in a statement. "This transaction is in line with our strategy to realize shareholder value."

CBRE Global Investors carried out an independent valuation of the hotel giving an aggregate value of £250 million (approximately £500 thousand per key). 


Like this story? Subscribe to IHIF!

The hospitality industry turns to IHIF International Hotel Investment News as the must-read source for investment and development coverage worldwide. Sign up today to get inside the deal with the latest transactions, openings, financing, and more delivered to your inbox and read on the go.

The sale and leaseback will let the Group release 65 percent of that value while retaining a long-term lease, control of the operations and associated profits of the hotel, thereby keeping the remaining 35 percent within the Group. As of May 31, the Hotel had a book value of approximately £124 million.  
The transaction, which is subject to certain conditions precedent commensurate with the sale and leaseback being fulfilled, is expected to be finalized this month.
Following the repayment of the existing facility and the deduction of the transaction costs associated with the sale and leaseback, together expected to be approximately £80 million, approximately £80 million will be readily available cash and is intended to be used to further improve and grow the Group's portfolio.

Suggested Articles

The company has allotted $40 million toward upgrades at the Bahia Principe Grand Tulum alone.

The upcoming property will be located next to the Miami Beach Convention Center, which underwent a $600 million renovation last year.

A few weeks after revealing it had taken on four new hotels in the South, the operator added another four, bringing its portfolio to 121 properties.