Host Hotels Grabs London’s Le Méridien Piccadilly Hotel for $97.6M
- Jul 23, 2010
July 23, 2010
By Barbra Murray, Contributing Editor
Bethesda, Md.-based Host Hotels & Resorts Inc. has acquired the five-star Le Méridien Piccadilly in London for approximately $97.6 million from London-based Starman Hotels, a joint venture created in 2005 between affiliates of Greenwich, Conn.-headquartered Starwood Capital Group and the now-defunct Lehman Brothers Holdings Inc. The 266-room leasehold hotel did not change hands unencumbered; the price tag included Host Hotels’ assumption of $50.3 million in existing debt
Developed in 1908 and recently renovated, Le Méridien sits in the Mayfair district of London’s West End and, in addition to its luxury guestrooms, features 12,000 square feet of meeting space, a restaurant and a fitness facility.
Real estate services firm Jones Lang LaSalle Hotels orchestrated the disposition of Le Méridien on behalf of Starman, which put the property on the market as part of its divestment strategy. “This transaction confirms the strong appetite investors have in the London hotel market at present,” Robert Seabrook, Managing Director for Jones Lang LaSalle Hotels, noted in a prepared statement. “Strong trading fundamentals, a comprehensive international marketing exercise and transferable debt have facilitated an extremely smooth and successful transaction for all parties concerned.”
The London hotel market has not been a stranger to the consequences of the global economic crisis, but now it is in recovery mode. In the first quarter, the London market experienced a 9.8 percent jump in RevPAR, a 5 percent increase in occupancy and a 4.6 percent increase in average room rates, according to Deloitte’s most recent Hotel Market Outlook report.
The month of April did not bring such large improvements, but numbers for the following months are expected to demonstrate that the recovery is on track to continue. “The slight softening in outlooks for London and Regional U.K. demonstrates the impact that extraneous events such as the ash cloud and to a lesser extent the U.K. election can have on performance,” Deloitte notes in the report. “May and June look to be strong months with potentially the first gains in average room rates in the regions. Absent more ‘shocks’ the outlook is looking increasingly positive in both markets.”