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Von Essen likely to be sold piecemeal

10 June 2011 by
Von Essen likely to be sold piecemeal

The break-up of the Von Essen group looks likely to go ahead now that the company's 27 hotels have been officially put up for sale. Administrators Ernst & Young have appointed Christie & Co to handle the sale of the hotels, following the collapse of Von Essen with debts of more than £250m in April.

It is unlikely that an existing hotel group will bid the £200m-plus asking price for the entire portfolio of individual hotels - which vary in size from the nine-bedroom Ynyshir Hall in Powys, to the 45-bedroom Royal Crescent in Bath - due to the difficulty of operating them as one brand.

Due to economies of scale, the relatively small size of the properties - they average 24 bedrooms - is also likely to put off any corporate hotel group.

However, a large financial corporation may be willing to invest in the entire group, with a view to selling off the individual hotels after a two-to-three year period, if the property market picks up as expected.

Robert Milburn, UK hospitality and leisure leader of accountants PwC, said that the most likely scenario is that the hotels will be sold individually or in small groups of two to three. "Because of the bespoke nature of the properties, it will be easier for them to go on a piecemeal basis," he said. "My gut feeling is that existing independent hotel owners and high net worth individuals, both in the UK and from the Middle East, India and Pakistan, will be amongst the key bidders."

Editor of The Good Hotel Guide, Adam Raphael, said the best outcome for guests would be for the hotels to be bought individually.

"Hotels like Sharrow Bay and Amberley need the personal care and attention of an on-site owner."

Christie & Co has allocated 12 staff to work full-time on the disposal of the Von Essen hotels. "It is a very exciting instruction for us and we have already received interest from both major hotel groups and individuals," said Jeremy Jones, group director of corporate hotels at Christie & Co.

"We are looking for initial offers to be made by mid-July."

Meanwhile, the administrators Ernst & Young are believed to have found discrepancies in Von Essen's company accounts for 2010. According to The Times, accountants have found underlying profits of about £8m from turnover of £53m, compared to the £24.9m profit and £74.2m turnover which appeared in the company's annual report.

Andrew Davis, the founder of Von Essen, continues to own just three of his original extensive portfolio of hotels - Verta in London; the Forbury, Reading; and Llangoed Hal, Powys.

likely bidders

While interested parties are remaining tight-lipped about whether they are going to put in a serious bid for any of the Von Essen properties, the fact that some of the UK most iconic country house hotels are now on the market has sparked a huge amount of interest around the industry.

Groups operating in a similar market to Von Essen and who may be keen on cherry picking the highest profile properties include Hand Picked Hotels, Orient Express and the De Vere Group, while entrepreneur Duncan Bannatyne has said that he would like to add to his expanding group of hotels.

Also potentially interested are property investors such as London & Regional - owners of the Park Lane London Hilton - and Nicolas James, who may like to add one of the seaside hotels - Fowey Hall or Moonfleet Manor - to its Harbour Hotels Group.

up for sale

â- Buckland Manor, near Broadway, Gloucestershire - 13 bedrooms
â- Cliveden, Taplow, Berkshire - 38 bedrooms plus 2-bed cottage
â- Lower Slaughter Manor, Lower Slaughter, Gloucestershire - 19 bedrooms (pictured)
â- The Royal Crescent, Bath - 45 bedrooms
â- The Samling, Windermere, Cumbria - 11 bedrooms
â- Sharrow Bay, Ullswater, Cumbria - 24 bedrooms
â- Ston Easton Park, near Bath - 22 bedrooms
â- Thornbury Castle, near Bristol - 27 bedrooms
â- Ynyshir Hall, Machynlleth, Powys, Wales - nine bedrooms
â- Seaham Hall, Seaham, County Durham - 19 bedrooms
â- The Elms, Worcester - 23 bedrooms
â- Fowey Hall, Fowey, Cornwall - 36 bedrooms
â- Ickworth, Bury St Edmunds, Suffolk - 27 bedrooms plus Dower House with 11 apartments
â- Moonfleet Manor, Weymouth, Dorset - 36 bedrooms
â- Woolley Grange, Bradford upon Avon, Wiltshire - 26 bedrooms
â- Bishopstrow House, Warminster, Wiltshire - 32 bedrooms
â- Callow Hall, Ashbourne, Derbyshire - 16 bedrooms
â- Congham Hall, King's Lynn, Norfolk - 25 bedrooms
â- Dalhousie Castle, Bonnyrigg, Midlothian - 29 bedrooms
â- The Greenway, Cheltenham, Gloucestershire - 17 bedrooms
â- Homewood Park, Bath - 21 bedrooms
â- Lewtrenchard Manor, Okehampton, Devon - 14 bedrooms
â- The Mount Somerset, Taunton, Somerset - 19 bedrooms
â- New Park Manor, Brockenhurst, Hampshire - 24 bedrooms
â- Washbourne Court, Lower Slaughter, Gloucestershire - 30 bedrooms
â- ChÁ¢teau de Bagnols, Beaujolais, France - 21 bedrooms

Von Essen hid financial woes, says report>>

TagsHotels
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