Hilton Portfolio of 9 UK Hotels Sold

Main Photo: The Hilton Puckrup Hall, Tewkesbury

Date: February 2019

Location: UK

Name: Hilton hotels in Croydon; Watford; Nottingham; Leeds city centre; Northampton; York; East Midlands Airport as well as the Hilton hotel and Woodcourt Lodge in Cobham, Surrey and Hilton Puckrup Hall in Twyning, Tewkesbury.

No. of Keys: 1,444

Seller: Administrators of the business previously owned by Vincent Tchenguiz.

Buyer: The family of Israeli property tycoon Amir Dayan is among buyers of a portfolio of U.K. hotels leased to Hilton Worldwide Holdings Inc.,

The group of nine hotels, which entered a form of bankruptcy protection under U.K. insolvency laws starting in early 2018, was acquired by companies controlled by Vivion Investments Sarl for £246 million (US$315 million), according to a filing by the administrators appointed to oversee the properties.

All the hotels are operated under occupational lease agreements with a subsidiary of Hilton Worldwide with an initial unexpired term of around 11 years.

Property developer Vincent Tchenguiz bought the hotels in 2002 for £335.7m and leased them back to Hilton, which initially retained a 40% stake in the properties.

In 2006, Hilton sold Tchenguiz the rest of the interest under an agreement that would see the operator lease them until 2029.

Dayan’s family is among the investors in Vivion. A representative for the Dayan family didn’t immediately respond to requests for comment, according to Bloomberg.

The sale marks the start of a new saga for the Zinc Hotels portfolio that was once owned by Iranian-British businessman Vincent Tchenguiz. His Consensus Business Group tried to sell the nine hotels scattered across England, together with a more valuable property in London, for about 600 million pounds, in July 2017.

A deal couldn’t be reached and creditors instead put the businesses into administration, or a form of bankruptcy protection, the filing showed.

The most valuable hotel in the original portfolio, the Kensington Hilton in London, was sold separately for £261.5m to a company controlled by hotelier Bakir Cola.

Brokers Savills Plc and Jones Lang LaSalle Inc. were hired to manage a sale of the remaining properties.

“The disposal of the Zinc portfolio is indicative of the unabated appetite for U.K. hotels, particularly those with attractive lease terms and long-term value enhancement opportunities,” according to Rob Stapleton, a director at Savills.

A representative for Savills declined to comment on the identities of investors behind Vivion.

Zinc is the second acquisition within the hospitality industry by Vivion in the past year, and follows the £750m purchase of the Ribbon portfolio of Holiday Inn and Crowne Plaza hotels.

Dayan’s Ouram Holding vehicle separately owns about 23 percent of German landlord TLG Immobilien AG.

Price: £246m

Price per Key: £170,360

THPT Comment: Good to see a new entrant to the UK hotel scene.

First Seen: Bloomberg

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