US real estate services provider HFF has secured its first major UK mandate to advise the owners of a £1.3bn London luxury hotel empire.
The firm has been instructed review options for the future of the Grange Hotels business, owned by the Matharu brothers, which is one of London’s largest privately held hotel companies.
HFF has been appointed to investigate a new future for the hotel empire, which could result in a sale of some or all of the business.
The brothers and founding partners, Harpal, Raj and Tony, are all approaching retirement age. A sale of some of its 19 hotels would allow one or more of the brothers to exit the business. Hotel investors and sovereign wealth funds have already begun to circle the opportunity.
This instruction marks HFF’s first UK mandate. The US firm acts as a hybrid of large advisory firms and boutique investment banks. It made its entry into the UK in November 2016 when it poached two senior CBRE directors, Jamie Pope and John Starkie.
It then agreed a deal to buy Leon Partners, paving the way for the firm to eat up market share from its rivals by focusing on investment banking and corporate finance, investment agency and debt advisory, with a focus on London.
The firm has continued to poach directors from rival firms. Tom Brook from CBRE and Andrew Laing from Eastdil Secured, the company’s main competitor in the US, will join on 1 May.
HFF hires new directors to focus on central London market >>
The Matharu brothers had previously been considering what to do with the future of its business, but no formal instruction was made. The three brothers started the business 25 years ago, converting London offices to hotels. The brothers have never sold any of their properties.
The review process is ongoing and no decision has been made. As well as considering a sale of some or all of the business, other options include bringing in new debt to replace its current loans, which totalled £220m as of 31 March 2015. That debt matures in December 2018. It could also look to replace an existing equity source.
Grange Hotels’ 19 properties spread across prime central London have more than 2,000 bedrooms between them. Trophy assets include the 433-bedroom Grange St Paul’s, EC4, and the 370-bedroom Grange Tower Hill, E1.
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■ This content was originally published on 15 March 2017
