London Hotel Owner Defies Virus Panic, Plans $1.3 Billion Sale
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The seller of London’sWestbury Hotel is betting its prime location in the glitzy Mayfair district will lure buyers even as the global coronavirus epidemic batters the tourism industry.
Westbury ownerCola Holdings is pitching the portfolio of three adjoining properties as a once-in-a-generation chance to acquire a prime safe-haven asset in one of the capital’s choicest areas. The firm also has planning approval to extend and partially redevelop the hotel, enhancing its value to potential bidders, according to an emailed statement from brokerSavills Plc.
“Given its position, if anyone was ever going to be fixated on one deal, this is going to be it,” saidAnthony Selwyn, co-head of global retail at Savills, which has been appointed to seek bids for the properties. “All of the buyers we are talking to know the location, they know the buildings well, so the virus itself is not really interrupting our process.”
The escalatingcoronavirus crisis has rocked global markets, and companies in the tourism trade from cruise-ship operators and airlines to hotels have been hard hit. In the U.K., Prime Minister Boris Johnson’s spokesman said both the government and Bank of England are ready to take action to bolster the economy if needed.
The timing of Cola’s offer also means it will be competing for interested buyers with the billionaire Barclay brothers, who are in theprocess of selling the Ritz hotel. Still, Cola is counting on the portfolio, which also includes the Burberry store on Bond Street and Washington House, home of the Conduit Club, to bring in north of 1 billion pounds ($1.3 billion) on the strength of its prime location.
The opportunity to completely re-brand the Westbury and bring in a new operator could appeal to major luxury brands such as LVMH, which has beenlinked to the Ritz deal in U.K. media reports.
The renovation plan includes nearly doubling the average room size to provide more of the large suites craved by high-end travelers. It will also extend the hotel by removing the top two floors and replacing them with three new stories.
Cola plans to sell ahead of the redevelopment, which could close the hotel for two to three years, Selwyn said. The company continues to invest in other hotels in London and internationally.
Burberry Group Plc is preparing to refurbish its store, which occupies the corner of New Bond Street and Conduit Street and has about a decade left on its lease. The Conduit Club, which operates in the building on the other side of the hotel, has about 20 years left on its lease.
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