Sale of St James's Hotel and Club brings in foreign investors
The St James's Hotel and Club is the latest luxury hotel in London to be generating widespread interest from foreign investors as it goes up for sale.
Situated in a quiet cul-de-sac in Mayfair, the five-star, 60-bedroom hotel, is attracting offers of more than £60m.
Henrik Muehle, the hotel's managing director, said that the property would represent a trophy asset to any investment group.
"There are some serious investors from overseas with money to purchase landmark retailers and hotels in London," he said. "With occupancy expected to thrive through 2010 and beyond 2012, with a long-established brand and a prime Mayfair location, it is not altogether surprising that our hotel is now attracting serious attention with offers in excess of £1m per hotel bedroom."
The St James's Hotel & Club reopened in 2008 following a two-year renovation. Managed by the German-owned Althoff Collection, the hotel has been boosted by the high-profile appointments of Muehle, previously at the Capital hotel, London, and William Drabble from Aubergine as executive chef.
Other major London hotels currently for sale include two properties owned by the Royal Bank of Scotland - Grosvenor House, a JW Marriott hotel in Park Lane, on the market for up to £600m, and the Cumberland hotel in nearby Marble Arch. Le Meridien Piccadilly, owned by Starman Hotels and operated by Starwood Hotels, is also on the market for £65-£70m.
The weak pound, which has allowed London to perform relatively well throughout the recession, compared with most European cities, has undoubtedly helped encourage owners that now is a good time to cash in on their investments, as well as create interest from overseas. Investors from the Middle East are believed to be particularly interested in expanding their foothold in the lucrative London hotel market.
Hotel industry consultant Melvin Gold said that the continuing economic and political uncertainties and the knowledge that we are not yet out of the wood may have also influenced investors' timing.
"Of course a sale at this time allows any new investor to factor positive cash-flow from the Olympic period into their investment decision," he said.
Gold believes that the change of ownership of London's leading hotels is good news for guests.
"New owners would always wish to seek to ensure that their acquisition retains its value, thus ensuring a good standard of operation and appropriate investment in the property will be paramount - both being to the guests' advantage," he said.
Grosvenor House on market for £600m>>
Bank puts Cumberland hotel up for sale>>
Starman seeks up to £70m for Le Meridien>>
St James's Hotel and Club reopens>>
By Janet Harmer
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