The Bhatia family is in advanced talks to buy the DoubleTree by Hilton hotel near the Tower of London, EC3, for more than £300m from Blackstone.
The sale of the 582-bedroom asset for more than £515,000 per bedroom would be the latest in a string of disposals by private equity investors moving to sell out of hotels they bought after the global financial crisis.
The Bhatia family’s purchase is also indicative of increased appetite to buy established hotels from more traditional private, institutional and sector-specialist investors.
The Livingstone brothers’ London & Regional and US REIT Host Hotels & Resorts had also been vying for the hotel.
Blackstone’s sale would take it closer to exiting its nine-asset Mint hotels portfolio, which it bought from Lloyds Banking Group in 2011 for £600m (see box).
George Nicholas, Savills’ global head of hotels, said: “The strong underlying business fundamentals are driving strong interest into the lodging sector by private and local investors.
“In the absence of obvious public-market exit opportunities, we anticipate that private equity owners will continue to explore selling to UK-based investors despite significant interest from overseas investors.”
According to CBRE Hotels’ head of EMEA brokerage Dominic Murray, private equity firms were net sellers of UK hotels by £207m in the first half of the year and were net sellers last year by £3bn.
London & Regional bought the £538m Atlas portfolio of 47 Holiday Inn Express hotels from Lone Star in May.
Lone Star has an investment programme across its 74-hotel Amaris Hospitality company ahead of an expected sale or float next year. Amaris includes formerly distressed hotel groups bought from banks following the financial crisis, including Puma Hotels and Jurys Inn.
Starwood Capital, which amassed a substantial portfolio during the crash by buying companies such as DeVere Hotels and Principal Hayley, has yet to make substantial divestments in the UK but has begun doing so in Europe.
The Bhatia family’s portfolio includes the Hilton London Paddington, W2, and Waldorf Hilton, WC2. The family is led by matriarch Gulshan Bhatia, an Indian political refugee from Tanzania who fled to London in 1976 and set up a bed and breakfast in Paddington.
Eastdil Secured is acting for Blackstone.
What happened to Mint?
Blackstone bought the nine-asset Mint hotel portfolio from Lloyds Banking Group in 2011. It subsequently rebranded the hotels under Hilton brands. Blackstone owned Hilton following its $26bn take-private in 2007 before floating it again in 2014.
• Glasgow, Leeds, Birmingham, Bristol and Manchester – sold to Marathon Asset Management for £160m last April
• DoubleTree by Hilton Tower Hill – being sold to the Bhatia family for £300m
• Dublin – sale to Dalata agreed this week through Savills for €180m
• Amsterdam – for sale through Eastdil Secured and CBRE for €340m
• DoubleTree by Hilton Westminster – due for sale imminently through Eastdil Secured for £172m
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