Grange hotels sold to Queensgate in £1b deal

15 March 2019 by
Grange hotels sold to Queensgate in £1b deal

Four London hotels are set to be rebranded as Leonardo properties following their sale from Grange Hotels to Queensgate Investments in a deal understood to be around £1b.

The 307-bedroom Grange City, 201-bedroom Grange Holborn, 460-bedroom Grange St Paul's and 370-bedroom Grange Tower Bridge hotels have been acquired by Queensgate, which owns Generator Hostels and the Holiday Inn London Kensington Forum.

The Israeli-based Fattal Hotel Group has acquired the long-term lease on all four hotels, marking its first entry into the central London market. The hotels will be operated by Jurys Inn & Leonardo Hotels UK and Ireland, Fattal's European arm.

The Tower Bridge, St Paul's and City hotels will become Leonardo Royals, and Holborn will become the group's first NYX Hotel by Leonardo Hotels in the UK, with the rebrands set to take place in "a matter of weeks" according to Jason Carruthers, managing director of Jurys Inn & Leonardo Hotels UK and Ireland.

Jason Kow, chief executive of Queensgate Investments, said Queensgate was "proud" to have completed the "milestone acquisition".

A spokesman for Grange Hotels said: "We are delighted with the outcome of the transaction. We acquired, developed and constructed the portfolio over a period of 20 years. The four hotels give the purchaser immediate scale in excellent locations, in one of the most highly sought-after and dynamic markets in the world."

Speaking to The Caterer, Carruthers added that the hotels will undergo "transformational refurbishments", which are expected to mostly be completed by early 2020.

"Our intention for growth is very much now being realised," said Carruthers, describing the properties as "too good an opportunity to miss", with London being an "obvious opportunity" for the group and the acquisition just the start of further expansion plans in the city.

David Fattal, chief executive of Fattal Hotel Group, added: "The Fattal Hotel Group is very happy to become active in central London, with the operation of four significant and highly regarded hotels."

"We are considering other opportunities for the Nyx brand but Leonardo and Leonardo Royal will be our main vehicles for our growth," he added.

Jurys Inn & Leonardo Hotels UK and Ireland now has 53 hotels and more than 11,000 rooms under management. Before the acquisition the group's only London properties included two Jurys Inn hotels in Watford and Croydon and a Leonardo hotel at Heathrow Airport.

In August, Fattal revealed plans to invest £32m in the redevelopment and expansion of the existing Jurys Inn Edinburgh hotel and its neighbouring site. The investment includes proposed plans to extend the existing Jurys Inn by 100+ rooms and convert an adjacent listed building into a new 131-bedroom NYX-branded.

Jurys Inn was merged with Leonardo in 2017 when Fattal and Swedish hotel investment company Pandox acquired the portfolio for £800m.

Fattal also acquired a site on Manchester's Adair Street in December where it will open a 275-bedroom Leonardo hotel in 2021, and the leasehold of the 173-room Grand Harbour hotel in Southampton from US hospitality group Westmont for £29m last year. Pandox entered into an agreement to acquire Manchester's Midland hotel for £115m from Aprirose last year, with a bedroom refurbishment programme set to launch this summer.

Jurys Inn and Leonardo Hotels UK and Ireland is also exploring a possible sale of two of its Leonardo hotels in Scotland, expanding its Inverness and Oxford Jurys Inn hotels, and refurbishing its Exeter and Croydon properties. "The Jurys Inn estate will not stand still," added Carruthers.

Grange Hotels' entire 17-strong portfolio was expected to change hands last year. The fate of the remaining 13 hotels is uncertain. Grange Hotels is privately owned by brothers Harpal, Raj and Tony Matharu.

Queensgate secured a fully underwritten debt facility from Société Générale, the Carlyle Group and Cheyne Capital for the transaction. Brown Rudnick and EY advised Queensgate. HFF Securities acted as exclusive financial adviser to Grange.

Christie & Co predicts new era of long-term hotel owners >>

Queensgate acquires Generator Hostels from Patron Capital in £393m deal >>

Queensgate buys Holiday Inn London Kensington Forum for £400m >>

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