Two hotels on the edge of the Olympic Park at Stratford have been sold to the Singapore-based M&L Hospitality group, for £58m, after receiving widespread interest from UK and overseas.
M&L Hospitality, which now owns 12 hotels in locations which include Singapore, Japan, Australia and New Zealand, is making its entry in the UK market with the acquisition of the two properties.
The £58m sale price is worth £165,000 per room and had a 2013 capitalisation rate of 6.9%. The capitalisation rate is calculated by dividing the asset's income after costs by the total value of the asset.
Neil Maxwell, chief executive of M&L Hospitality, said: "Entering the London hotel market was vital for us as it is less susceptible to fluctuations in demand and has a flourishing corporate traveller base.
"We look out for top-performing, income-producing hotels from around the world that tap into interesting trends within the sector. With the Olympic legacy alive and kicking in London and the potential for the extended-stay model to take-off, we believe the UK hotel sector is one to watch."
Josh Wyatt, investment director of hospitality at Patron Capital, said that the company's acquisition of the two hotels in January 2011 was a vote of confidence in an unproven investment zone. "With the arrival of Westfield Stratford City and the Olympic Park, followed by the ongoing investment in the area, these hotels are now in an internationally recognised location and at the centre of significant facilities for retail, business and the community," he explained.
"This has been a very successful example of a complex, mixed-use development partnership amongst multiple partners including Westfield, Patron Capital, IHG and Cycas Hospitality. While we anticipated holding this investment for many years and continuing to participate in the successful regeneration of the area, we welcome the buyer's interest in furthering our efforts with the existing partners."
Patron Capital owns a portfolio of 44 hotels, including 26 Mercure branded properties operated by Jupiter Hotels and previously owned by Jarvis Hotels. It also backed Halcyon Hotels and Resort's purchase of seven hotels from the Von Essen stable, off a guide price of £40.5m to form Luxury Family Hotels
By Janet Harmer
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