Israel’s Clal Insurance Acquires 49% Stake in Two London Hotels From PPHE
Main Photo: The Fab views from the Park Plaza Riverbank
Date: June 2021
Location: South of the River (Thames) and Hoxton, East London, England, UK
Names: Park Plaza London Riverbank and art’otel London Hoxton – opening 2024
No. of Keys: 645 and 343
Seller: PPHE, formerly Park Plaza Hotels Europe, headed up by Boris Ivesha.
Buyer: The Israel-based Clal Insurance has acquired a 49% stake in a new JV with PPHE (formerly Park Plaza Hotels Europe) for £113.7 million. The JV holds two assets, being the 645-room Park Plaza London Riverbank, as well as the £200 million, 343-room, 27 storey art’otel London Hoxton development project in Shoreditch. The deal values the Riverbank property and the all-in development cost budget of the art’otel at £542.3 million (€548,000 per room, less the value of some 5,000 sqm of office space in the art’otel project). The special purpose company will indirectly hold the real estate and operations of the two assets, and Clal will also invest a further £12.1 million into the art’otel project, which is scheduled to be completed in early 2024.
Eli Papouchado, chairman and founder of PPHE Hotel, said: “Clal’s investment reflects our mutual confidence in the strength of the London hospitality real estate market. The agreement values these two assets at the group’s latest net asset value and the proceeds will enable the group to pursue new growth opportunities as the pandemic period subsides.
“The joint venture with Clal comes at a very exciting time as we look to rebuild our business, capitalising on the extensive investment programmes, which we completed just before the pandemic struck.”
Boris Ivesha, president and CEO of PPHE Hotel, said: “London is one of world’s most resilient hotel and real estate markets and it typically rebounds quickly after downturns, largely due to its wide appeal to tourists and business travellers alike. We are delighted to see signs of growth and recovery already in the UK market.”
THPT Comment: Good move for both parties…brings cash in for PPHE and a foothold in the London hotel market, still amazingly strong, for Clal Insurance.
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