Mandarin Oriental Savoy Zurich Owner, Credit Suisse, Puts Hotel For Sale for CHF 400m Due To Financial Woes
Main Photo: The Savoy Baur en Ville, as was
Date: October 2022
Name: Hotel Mandarin Oriental Savoy Zurich
Location: Paradeplatz, Central Zurich, Switzerland
Number of Keys: 104, as The Savoy Hotel Baur en Ville
Seller: Credit Suisse
Buyer: Open at this time
Credit Suisse, the investment bank whose shares plummeted to record lows this week over fears it could be on the brink of collapse, is selling the five-star Savoy hotel in the centre of Zurich for as much as 400m Swiss francs (£361m).
The bank, whose stock has fallen by more than 40% in the past six months, said on Thursday it had put the 184-year-old hotel on Paradeplatz in the heart of the city’s financial district on the market as part of a regular review of its global real estate assets.
“As part of this process, the bank has decided to start a sales process for the Hotel Savoy,” a spokesperson said. “We will carefully assess all offers and potential investors and communicate any decision in due course.”
The news was first reported by the financial news blog Inside Paradeplatz. It said the hotel, which is undergoing a major refurbishment and due to reopen in 2024 as Hotel Mandarin Oriental Savoy Zurich, was the bank’s last remaining “trophy asset” and described its sale as a “king-size distress signal”.
“The intended sale of the Savoy shows how serious the situation at the big bank is. Despite the conversion and restart as Mandarin in 2024, [Credit Suisse] apparently wants to part with the noble building in a top location as an emergency,” said the blog, which is written by Lukas Hässig and has broken a string of market-moving stories in Switzerland.
“The CS bosses feel compelled to throw everything that still has value on the market. You need liquidity to stay afloat – too many customers are running away.”
Credit Suisse has had to urgently raise capital, stop share buybacks and cut it’s dividend after a serious of crises and scandals. The bank plunged from a profit of Sfr2.7bn in 2020 to a loss of Sfr1.6bn last year, driven mostly by big losses on its investments in the failed supply chain finance group Greensill and the hedge fund Archegos – where US authorities have charged founder Bill Hwang and three others with racketeering and fraud offences after its collapse.
Credit Suisse has also paid large fines after admitting to fraud over bonds it issued that were supposed to be used to fund tuna fishing in Mozambique but where some of the proceeds were diverted by one of it’s contractors in the country to pay kickbacks, including to bankers at Credit Suisse.
And it’s private banking division – traditionally a cornerstone of Swiss banking – has been put under pressure after Suisse secrets, an investigation conducted by a consortium including the Guardian that exposed the hidden wealth of clients involved in torture, drug trafficking, money laundering, corruption and other serious crimes.
Credit Suisse shares, which were worth more than Sfr9 in January, collapsed to a record low of Sfr3.5 on Monday, but have since recovered slightly to Sfr4.2. (6th October 2022)
The hotel was managed by Credit Suisse until it’s closure in 2022, when is started the renovation before plans to reopen as the Mandarin Oriental Savoy, Zurich, in 2024.
The historic property was founded in 1838 by Johannes Baur, a baker apprentice from Vorarlberg, and is located on Paradeplatz, the main square in Zurich’s old town.
The hotel has already seen a couple of important renovations in it’s lifetime, first in 1907 and subsequently from 1975 to 1978. The upcoming renovation will last two years and will be overseen by French interior designer Tristan Auer.
The Mandarin Oriental Savoy, Zurich, will have 80 rooms and suites (reduced from the current 104), and three dining venues, including an all-day restaurant and a lobby lounge. The renovation will also see the addition of a state-of-the-art fitness centre, and a refurbishment of conference and event facilities, including the grand historic ballroom.
Price: 400m CHF – Around £360m
Price Per Key: Around CHF 3.8m, with construction costs to be finalised. Under Mandarin management, CS planned to reopen as 80 rooms and suites!
THPT Comment: Oh dear…a Swiss institution as famous as Credit Suisse appears to have come unstuck over non hotel-related woes… We are awaiting for details as to who will manage the sale…Interested parties should contact THPT
First Seen: UK’s Guardian newspaper
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