Real estate group swoops for Hilton hotels in sign of recovery

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The UK Hilton hotel chain was sold to real estate group Henderson Park in a multi-million pound deal as a sign of a recovery in the travel sector and urban accommodation markets.

Hilton’s portfolio of 12 hotels and more than 2,400 guest rooms includes hotels in London, Edinburgh, Dublin, Bristol and Coventry. According to people with terminology knowledge, it was valued at £ 555m.

The transaction was funded by debt from the credit division of Apollo Global Management, a private equity group.

Henderson Park said it plans to invest an additional £ 40m in expanding the hotel and improving its facilities. We have a plan permit to build two more floors at the Edinburgh Hotel, for example, adding 31 rooms.

Nick Weber, founding partner of Henderson Park, said:

“You have Islington and Chelsea, you have Edinburgh … I feel like you’re buying at a very attractive price. It’s not a distressed price. We see the recovery seen in other assets. I believe we are working on it, “he added.

Previous hotel transactions at Henderson Park included the purchase of a 440-room Westin hotel in Paris © Alamy

Despite the almost complete suspension of travel during a series of blockages, the hotel sector had far fewer bankruptcies than many analysts and investors expected at the beginning of the pandemic.

Owners, backed by generous banking and government support schemes, have held real estate in the hope of achieving better return on investment as travel recovers.

The Hilton property was sold by a public company through a selected process involving only three or four prospects, according to those with negotiating knowledge.

The deal is consistent with the value of Henderson Park’s previous hotel deals, including the purchase of the 440-room Westin Hotel in Paris and the two largest hotels in the UK, the London and Birmingham Hilton Metropoles.

The hotel occupies more than one-fifth of Henderson Park’s portfolio, including office blocks and industrial land. Since its inception in 2016, it has invested $ 11 billion in real estate assets.

According to Weber at Henderson Park, the 1,100-room London Metropole occupy an average of 49% in September, even higher on weekends. He added that bookings for meetings and events in 2022 were at the same level as in 2020 in September 2019.

According to industry data provider STR, the average UK hotel occupancy hit a low of 21.9% in April 2020, but recovered to 71% in August, boosted by domestic holiday demand. bottom.

Hotels that rely on international visitors in central London are lagging behind, with an average occupancy rate of 56% in August due to strict travel restrictions in the United Kingdom. ease last month.

Joe Green, co-head of hotel brokerage at real estate firm CBRE, said real estate prices remained high, coupled with the sector’s lack of financial difficulties and confidence in hotel recovery.

“When a lot of money has been raised by investors for a hospitality transaction, and a lot of money has been raised and there is not a lot of good supply for pricing.”

Despite warnings that video conferences will hurt the sector, Green said, “Investors expect travel to return to its previous state and people need to travel for work. I’m doing it. “

Real estate group swoops for Hilton hotels in sign of recovery Source link Real estate group swoops for Hilton hotels in sign of recovery

The post Real estate group swoops for Hilton hotels in sign of recovery appeared first on California News Times.

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