Cerberus and Highgate Join Forces for £115m Acquisition of Dorsett City London Hotel From the Far East Consortium International
Main Photo: The Rooftop bar at the Dorsett City London
Date: June 2021
Location: Aldgate Street, City of London, England, UK
Name: The Dorsett City London
No. of Keys: 267
Seller: Far East Consortium International, who developed and opened the hotel in 2017, following their first London opening in West London in 2014. Far East is a Hong Kong listed conglomerate, with property development, hospitality, car parking ventures and gaming and entertainment interests in mainland China, Hong Kong, Malaysia, Singapore, Australia, New Zealand, the United Kingdom and Continental Europe, headed up by David Chiu and his family, with Hospitality headed up by Ms Winnie Chiu.
Their hotel brands include Silka Hospitality, d. Collection as well as Dorsett, and partnerships with Agora Hospitality, Diamond Resorts and Trans World Hotels
Buyer: Cerberus Capital Management has teamed up with Highgate to the buy the Dorsett City London hotel from the Hong Kong-listed Far East Consortium International for £115m.
The hotel, located at 9-13 Aldgate High Street, further strengthens Cerberus’ and Highgate’s presence in the UK and European hospitality sector, the duo said, having recently jointly purchased six hospitality portfolios from Colony Capital.
The property is a 267-room midscale hotel developed and operated by Far East Consortium International’s Dorsett Hospitality brand. In a Hong Kong stock market filing Tuesday the consortium confirmed it had sold for £115m.
Far East Consortium International said the sale and entering into a hotel management agreement with the buyers will, among other things “realise the value of the Dorsett City London Hotel, allow the gain from the sale to be crystalised and the capital to be recycled, increase liquidity and reduce net gearing, and provide the group with an income stream from the management fee upon the stabilisation of the hospitality sector post COVID-19”.
“We are excited to add Dorsett City London to our growing portfolio of high-quality U.K. and European hospitality assets,” Lee Millstein, president of Cerberus Global Investments and global head of real estate for Cerberus, said in a statement. “With Cerberus and Highgate’s combined financial and operational expertise, we believe we will be able to elevate the guest experience and position the hotel for success as the market recovers. We see significant opportunities in the UK and European hospitality sector that play to our strengths and disciplined approach to long-term investing.”
Mehdi Khimji, co-founder and managing principal of Highgate, added: “Highgate is excited to collaborate with Cerberus to acquire this prominent London property that is poised to meet the steadily rising demand for premier hospitality experiences for business and leisure. This acquisition is emblematic of Highgate’s strategy to expand further into the UK and European markets by acquiring and managing quality assets.”
Cerberus’ real estate platform manages approximately $26bn of assets with more than 135 investment professionals and asset managers located in the United States, Europe, Asia, South America and Australia. In March, Cerberus closed approximately $2.8bn of commitments for Cerberus Institutional Real Estate Partners V, L.P., it’s flagship global opportunistic real estate strategy.
Highgate is a hotel player throughout the United States and across Europe, and operates more than 350 hotels and approximately 65,000 rooms around the world. It recently bought and then sold the pan-European K+K Portfolio, which consisted of 10 Hotels in European capitals.
Price: £115m
Price per Key: £430,711
THPT Comment: Great move for the two partners…allows Highgate it’s continued expansion outside of their home US base. We have been tracking this hotel for some time amid rumours that hotel was for sale….clever to keep the management and branding, considering it’s other London properties. A fair buy price, but shows that London is no Covid-discount haven.
First Seen: Co-Star UK
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