PPHE (Park Plaza Hotels Europe) Buys Out Remaining Half of London Hotel JV

Date: January 2018

Location: Hackney, London, UK

Name: Art’otel London Hoxton

No. of Keys: 318

Seller: Aldersgate Investments (otherwise known as the Reuben Brothers), also 12% owner of Belmond, about to develop the In and Out Club in Piccadilly, London, UK, would be owner of London’s Grosvenor House, a portfolio of boutique hotels across the South East of England including Lingfield Park Marriott and a whole host of other stuff!

Buyer: Netherlands-based PPHE Hotel Group has bought out the remaining 50-percent stake in London hotel joint venture Aspirations from long-time partner Aldersgate Investments. The £35-million deal is slated for completion in March 2018.

PPHE will fund the acquisition of the JV, which owns the site near Old Street, Rivington Street, Great Eastern Street and Bath Place in East London Hackney, using its current cash resources.

PPHE and Aldersgate Investments entered the JV in 2008 through investing £11 million in half of the company.

Aspiration has set plans to develop the site into the Art’otel London Hoxton—the newest member of PPHE’s Art’otel brand. “The acquisition will enable the company to control the timetable for construction and hence construction of a mixed-use scheme consisting of the 318-room Art’otel London Hoxton, office and commercial space and ancillaries are now expected to commence in the second quarter of this year,” PPHE told London South East.

Boris Ivesha, CEO of PPHE, added that construction on the upcoming Art’otel is scheduled to begin in the second quarter of 2018. The hotel will join the Art’otel London Battersea Power Station, which is currently under construction and opening in 2019, in expanding the brand’s portfolio. The Art’otel brand has another six properties in Europe with four in Germany, one in Budapest and one in the Netherlands.

PPHE’s portfolio has 39 owned, leased, managed and franchised hotels with more than 9,000 guestrooms across Europe, the Middle East and Africa. These operate under PPHE’s brands Park Plaza Hotels & Resorts and Art’otel.

The group also owns a stake in Arena Hospitality Group to lead and expand its presence in Croatia through the Arenaturist Hotels & Resorts and Arena Campsites brands. Its hotel development pipeline has two projects planned to open in the end of 2021.

The opening of PPHE Hotel Group’s Park Plaza London Waterloo (494 rooms) and Park Plaza Park Royal (212 rooms), in 2017 helped boost group hotel revenue.

This is according to the group’s trading update for the year ending 31 December 2017, in which it reports a group hotel revenue increase of 19% year-on-year.

The owner of the Park Plaza and Art’otel brands added that, on a like-for-like basis, group hotel revenue increased by approximately 10%.

Reported group revenue per available room (revpar) increased by approximately 10% to £92.90. Average room rate increased by 8.2% to £120.20, while occupancy increased to 77.3% (2016: 76%).

Like-for-like revpar increased by 11.5% to £92.40 mainly as a result of strong revpar growth achieved through a 7.8% increase in average room rate to £119.70. Occupancy increased to 77.2% (2016: 74.6%).

Also in 2017 the group completed the sale and leaseback of the Park Plaza London Waterloo, renovations continued during the year at Park Plaza London Riverbank and works commenced at the Park Plaza Sherlock Holmes London, which are expected to continue throughout 2018.

 

THPT Comment: Interesting partnership between one of the cleverist hotel developers and one of the shrewdest property developers in London…one assumes the separation was amicable.

First Seen: Hotel Analyst and Hotel Management

and The Caterer