Date: April 2018…Updated June 2018
Location: 5 The Strand, formerly an 72,359 sq. ft. office building, currently let to Westminster City Council and Boots,
Name: TBA…see below
No. of Keys: 210-235
Seller: BlackRock UK Property Fund. Cushman & Wakefield and Tudor Toone were instructed to sell the building in January for £80m – a net initial yield of 4.62%. At £90m, this is a decent uplift on the guide price.
Blackrock acquired the building in 2011 from a private investor for £53.5m.
BlackRock secured planning consent in July 2017 for a new 152,400 sq ft office, residential and retail development. The consented plans include 61,670 sq ft of office accommodation between the first and sixth floors, 5,376 sq ft of retail space on the ground floor and 38,941 sq ft of luxury residential accommodation.
Buyer: Abil Group from Pune in India, headed up by Avinish Bhosale. The group has four luxury hotels with a total of 944 keys in its hospitality portfolio in India.
This includes St. Regis in Mumbai, W Goa, The Westin in Pune and Le Meridien in Nagpur.
The proposed project marks ABIL’s foray into international markets and the group will be studying different global locations for more such opportunities.
The developer, which is understood to be making its UK debut, fought off competition from 21 other bidders to acquire the freehold asset on Trafalgar Square.
The building, was marketed with indicative plans designed by Adjaye Associates for a 200-room hotel scheme.
Price: Rs 900 Crore – just under £100m, which includes 5% stamp duty to buy and another £80m to develop.
The group is expected to finalise the management contract with a global hospitality major for the proposed luxury hotel over the next 6-8 months.
Price per Key: around £900k
THPT Comment: The deal follows a trend for office buildings in the West End to be targeted for conversion into a hotel. Abil represents a second wave of Indian/Asian/Sikh hoteliers to target the UK…from the early 70s we had the Vohra family with Sarova Hotels, related to Jasminder Singh with (now named) Radisson Edwardian, also related (by marriage) the Matharu brothers with Grange Hotels, Taj with a single property plus Residences in London’s St James, the Kapoor brothers with four hotels in Edinburgh to name but a few of the early pioneers.
This new wave of course includes the Hinduja Brothers with the upcoming Raffles London.
Recent targets for change of use have included the former US Embassy, which is being converted into a Rosewood hotel by Qatari Diar and Admiralty Arch which is being turned into a Waldorf Astoria.
Sir Michael Kadoorie is creating London’s first Peninsula hotel on the former office building at 1-5 Grosvenor by Hyde Park Roundabout, while Sir Richard Sutton won approval last month to turn Film House on Wardour Street into a hotel.
First Seen & Updated: Economic Times of India