Tchenguiz’s Kensington Hilton Sold for £260m
Date: October 2018
Location: Kensington, London UK
Name: Hilton London Kensington
No. of Keys: 603
Seller: Vincent Tchenguiz’s Consensus company
Buyer: Cola Holdings, founded by Monaco-based, Kurdish-born hotelier Bakir Cola and run by his son Azad. Cola own The five star Westbury hotel and the Holiday Inn London Kensington High Street (Kensington Close) in London.
The hotel was initially the trophy asset and largest building in a portfolio of ten UK hotels, which Tchenguiz had been seeking to sell for circa £600m.
The transaction has split the asset away from the other nine hotels, which are located in Cobham, Croydon, East Midlands, Leeds, Northampton, Nottingham, Tewkesbury, Watford and York and are understood to have a combined worth of circa £250m.
The properties are operated by Hilton but were owned by the tycoon’s Zinc Hotels group. The holding companies for the assets were put into administration by their lenders in January.
The secured creditors owed are Fortress Investment Group, Hayfin Capital Management and Bayerische Landesbank.
Financing arrangements put in place in relation to a restructuring in 2014 included a £250m term loan facility between Zinc and the lenders, which was repayable in July 2017.
Administrators AlixPartners had put the hotels back on sale in March after Tchenguiz launched legal action over the portfolio’s collapse into administration.
The relationship between Tchenguiz and Hilton has been fraught in recent years. Tchenguiz had tried to sue Hilton subsidiaries for £111m for not maintaining the hotels to a high enough standard under its occupation but was not able to recoup the claim through the courts.
Tchenguiz also unsuccessfully attempted to replace Zinc’s administrators, AlixPartners, having accused the company of having too “close” a relationship with the lenders.
Tchenguiz had initially acquired a stake in the properties in 2002 via a sale-and-leaseback with Hilton for around £335m before buying them outright in 2006, with Hilton agreeing to lease them until 2029.
The acquisition has proved to be a protracted process for Cola Holdings, which has been involved in discussions to purchase the hotel since 2016.
JLL and Savills were appointed by AlixPartners to handle the sale. All parties declined to comment.
THPT Comment; We have been following this deal, since it was first mooted in 2016. Great move for Cola. The hotel will need a fair few pounds spent on refurb…bit of a tour-operator/airline crew bed-factory, but at less than £450k a room for not far from central London, not a bad deal.
Price: £260m (originally mooted at £300m)
Price per key: £431,177
First Seen: Estates Gazette