Blakes owner GuestInvest plans to create luxury hotel in London landmark
GuestInvest, the hotel room investor, is in talks to buy part of London’s Somerset House to create a serviced hotel at the historic location.
It is thought the property investors club, which is run by chief executive Johnny Sandelson, is in advanced negotiations to buy the Pennethorne wing of Somerset House.
The former palace, at the north end of Waterloo Bridge, has been on the market since last year as a potential hotel opportunity.
The Somerset House Trust holds a 128-year head lease on the estate from the Department for Culture, Media and Sport (DCMS). It houses Revenue and Customs in offices at the former palace but it is thought that Revenue & Customs is to vacate the site. It has also been rumoured that the site could house an arts centre.
Jones Lang LaSalle was appointed to sell the site last year and has held talks with several potential investors.
Israeli hotel operator, property developer and investor Alrov Group, which is run by Alfred Akirov, is thought to have bid more than £50m for the grade I-listed landmark’s wing, but the deal collapsed last year. It has since bought Café Royal – part of the Crown Estate’s redevelopment of the Quadrant on Regent Street.
GuestInvest, which was launched in 2004, has a different approach. It sells ‘buy-to-let hotel rooms’ where investors have the opportunity to buy a luxury hotel room in which they can stay for free for up to 52 nights a year while receiving a rental income from its use the rest of the time.
Its first hotel was the Guesthouse West in Notting Hill and it launched its fifth hotel, the Jones, in Bayswater, last year. Its most famous hotel is Anouska Hempel’s Blakes, which it bought last November.
In January it paid £120m for two central London properties, bolstering its existing £180m property portfolio.
Its recent purchases were funded by a £200m injection from Bank of Scotland Corporate and it plans to expand into at least 10 cities.
The London hotel market has had a strong 2007. According to UK hotel report Hotel Britain 2008, compiled by advisory firm PKF, occupancy reached nearly 83% over the year and the strength of demand for rooms meant the average achieved room rate was increased.
Average room rate increased 8.9% to £130.17, meaning rooms’ yield increased by 10.3% to £107.96 – the highest in the capital since PKF started collecting data in 1974.
The DCMS and Jones Lang Lasalle would not comment on the sale.