London Olympic hotels sold for £58 million
Monday, 07 January 2013
January 7 - Holiday Inn's two flagship hotels opposite the London 2012 Olympic Park in Stratford have fetched £58 million ($94 million/€71 million) after being sold to an undisclosed Asian buyer only eight months after opening.
Built on a single 186,000 square foot site in Westfield shopping centre, the 188-room Holiday Inn London Stratford City and 162-room Staybridge Suites London, which also feature restaurants and conference space, were entirely booked out during the Olympics and Paralympics by London 2012.
The two facilities made just under £50 million ($81 million/€62 million) in January 2011 when Westfield sold them to European private equity company Patron Capital.
Despite originally planning to own the hotels for between five and seven years, Patron invited formal bids for the accommodation after it attracted unsolicited offers during the summer and the new deal, which is understood to involve an owner of international hotel brands in Asia, is worth £165,000 ($270,000/€200,000) per room.
The franchise deals for the hotels will continue to be held by InterContinental Hotels Group (IHG), whose brands include Holiday Inn and Staybridge, and be managed by Cycas Hospitality, which was set up by John Wagner who was involved in helping IHG roll out the Staybridge brand of extended stay hotels outside of the United States.
Patron's hospitality and leisure investment director, Josh Wyatt, explained that the sale highlights the growth potential of Stratford over a short space of time.
"We closed the transaction [to buy the hotels] at the end of 2010," he told the Financial Times.
"There was nothing over there.
"We felt the area would take quite a bit of time to mature.
"We thought it would take three to four years to establish a trading history.
"The hotels have outperformed expectations in terms of the business plan."
The Stratford area has enjoyed considerable capital investment in recent months, with the purchase of the 320,000 sq ft Stratford Centre, by joint venture partners Blackstone and Catalyst Capital, and International Quarter's £1.3 billion ($2.1 billion/€1.6 billion) office and residential project, by Lend Lease and London & Continental Railways.
Meanwhile, University College London is developing plans for a 23-acre Stratford campus next to the Olympic Park and BT was last month confirmed as the anchor tenant for the London 2012 International Broadcast Centre (IBC), which will house for its forthcoming sports channels.
"With the arrival of Westfield Stratford City and the Olympic Park, followed by the ongoing investment in the area, these hotels are now in an internationally recognised location and at the centre of significant facilities for retail, business and the community," Wyatt added.