Claridges Fronts the Eventual Disposal of the Savoy Group - It was reported in the national press that one of London's trophy hotel assets has been placed on the market with an estimated price tag of between £275 million and £300 million. The asset in question is the 203-room Claridge's, considered to be the jewel of the Savoy Group. If the asking price, as cited, is achieved, this would bring new heights to single asset hotel transactions, with a record amount of approximately £1.35 million per room. The successful disposal of Claridge's is likely to lead to the complete sale of the Savoy Group which was purchased by the Blackstone Group and Colony Capital five years ago. Potential buyers are thought to be high net worth individuals such as Prince Alwaleed Bin Talal of Saudi Arabia and Roman Abramovich, owner of Chelsea Football Club. Potential hotel operators such as Rocco Forte Hotels and Ritz-Carlton may also be potential suitors. However, city analysts have greeted the news with caution, questioning the timing of the sale considering the current market conditions. Nevertheless, 2003 has witnessed various successful trophy asset sales, including Browns Hotel in London, the Principe di Savoia in Milan and the Marriott Champs Elysées in Paris, achieving approximately £436,000, £469,000 and £585,000 per room, respectively.

Hyatt in Electric Mood with New London Hotel - Hyatt Hotels & Resorts has announced that it has entered into a 'technical agreement' to operate a 400-room hotel in London, as part of the redevelopment of Battersea Power Station. The news brings a sigh of relief to Hyatt, which has been without a presence in the UK capital since the end of 2001, when their management contract expired at the Hyatt Carlton Tower. The site, which is owned by Parkview International, was recently declared as one of the world's 100 most endangered sites. Outline planning permission exists for the mixed-use development, which also includes a 725-room conference hotel. Parkview is understood to be in negotiations with a number of operators for this second hotel, including Hyatt.

Pandox Announces Stable Set of Interim Results - Pandox, the Swedish hotel property company, announced a promising set of results for the first nine months of the year. Despite revenues declining by 1% to approximately €46.3 million, both income tax and cash flows improved, with pre-tax income, excluding non-recurring items, increasing by 2.4% to approximatley €17 million. According to the CEO of Pandox, Anders Nissen, the group delivered stable results in a difficult economic environment, with its hotel operations performing better 'than the market', aided by its focused strategy and high-quality portfolio. Pandox considers that the downturn continues in Europe's major markets, although there are distinct signs of recovery. Pandox now expects to exceed its 2003 forecast pre-tax income (excluding non-recurring items) of €21.6 million. During this period, the group disposed of the 134-room First Hotel Park Astoria in Enköping for around €2.7 million and acquired the 195-room Scandic Hotel Swania in Trollhättan for approximately €9.9 million.

Mövenpick Strengthens Hotel Network in the Middle East - Mövenpick Hotels & Resorts has continued its drive for expansion in the Middle East, having entered into a management agreement with the prominent Al Mussallam family of Saudi Arabia. The agreement enables Mövenpick to operate its second hotel in Jeddah, thus making a total of three hotels in the Kingdom. The hotel will comprise 210 rooms and is expected to open in early 2004. Mövenpick has two further openings planned in the Middle East in 2004,

the 106-room Mövenpick Hotel Bahrain and the 456-room Mövenpick Resort Taba in Egypt. Elsewhere in Bahrain, a luxury resort project off the north coast of Manama is planned. The €450 million project will comprise a five-star, 500- room hotel. The development will be operated by the Lulu Tourism Company, a joint venutre between the Ministry of Finance & National Economy and a local entrepreneur, Robert Mouawad.

Irish Investors Bid for Gresham Hotels - Following press speculation at the weekend, the board of the Gresham Hotel group confirmed that it had received a takeover approach from a consortium of Irish investors. According to the statement issued, the approach is conditional upon the support of the Israeli-based Red Sea Hotel Group, which owns a 28 per cent stake in the company. A sales price mooted in the press suggested a sum of around €100 million, although the board has confirmed that the price offered was lower. Following rampant exchange of the stock by investors as the news unfolded, the group's share price fell to €1, valuing the group at approximately €80 million.

Eye for a Luxury Resort in Zanzibar, Africa - International Financial Advisors, a Kuwait-based company, has announced that its subsidiary, IFA Hotels & Resorts, has entered into an agreement with the Zanzibar government to engage in a major tourist resort encompassing 300 hectares of land, with three kilometres of beach front. IFA has also purchased the private resort the Zanzibar Beach Hotel, which is set in four hectares of land. The luxury Zanzibar Beach Hotel & Resort, as the development will be known, will represent an investment of US$50 million over the next five years. As part of the development there are plans for an additional upscale beach hotel, the 150-room Al Qasar The Palace Hotel, which will feature a spa, an 18-hole golf course, villas and vacation club ownership. IFA plans to link this resort in Zanzibar, and planned resorts in South Africa, Lebanon, and Palm Jumeirah, Dubai, with its existing hotel and resort in Portugal, the Sheraton Algarve and Pine Cliffs Resort.

Gloomy Prediction for Moat Houses - Tipped to Lose Control of Five Hotels - Queens Moat Houses, the UK hotel operator, is set to lose control of five hotels within its portfolio, as the properties' owner, the Bank of Scotland, is looking to dispose of the assets. According to a report in the Times newspaper, the bank is holding discussions with investor Maurice Gourgey, who is understood to be prepared to pay £40 million for the hotels in Sheffield, Wigan, Winchester, Bristol and Reading, totalling some 531 bedrooms. Maurice Gourgey already owns other hotels in the UK, including the Mercure Hotel on the South Bank in London. While Moat Houses is keen to retain the management contracts of these five hotels, it is widely anticipated that control will be handed to a different operator. Meanwhile, Moat Houses is reported to be close to finalizing the sale of the 105-room Sloane Square Hotel in London for around £13 million.

Eastern European Coastal Resort Activity - The Austrian hotel operator Wilfried Holleis announced that a four-star tourist complex, named Miramar Adria, will be built in Opatija, a northern Croatian Adriatic resort. The complex will consist of the former Neptun Hotel and three new buildings. The first phase of the construction, estimated to cost around €7.6 million, is due to be completed by late 2004. Meanwhile, the Croatian Privatisation Fund announced that it is to sell an 89% stake in the Dubrovnikbased hotel operator Hoteli Mlini, consisting of some 433 rooms, for approximately €8.9 million. Meanwhile to the east, a total of €43 million has been invested in hotel construction and the modernisation of Bulgaria's northern Black Sea resorts, as reported by the regional chamber of commerce for tourism. A total of €26 million was invested in the development of six four-star hotels which opened in the resort of Zlanti Pyasatsi, meanwhile a further €13 million was invested in five hotels opening in the St Constantine and St Helena resort. Two additional hotel complexes are planned at the same resort, at a cost of approximately €12.8 million. Both projects are planned for completion in time for the tourist season of 2004.

NH Hoteles Profit Slump - Despite last week announcing a rise in sales, NH Hoteles this week declared a slump in its net profit, posting a 50% decline to €30.6 million for the first nine months of the year. NH Hoteles attributed the severe decline in its net profit to the tough economic climate and the fall in European business travel. Meanwhile, NH Hoteles is reported to be restructuring its operations in Germany as part of a major cost-cutting drive, saving an estimated €9.5 million per annum over the next 20 years. Finally, NH Hoteles has cancelled three 20-year rental agreements in Germany which it acquired through its acquisition of Astron last year.

London to Stage the Fourth Annual European Real Estate Opportunity & Private Fund Investing Forum - Information Management Network's fourth Annual European Real Estate Opportunity & Private Fund Investing Forum is to take place at the Carlton Tower Hotel in London on 11-12 November 2003. It is the premier educational and networking event for those with an interest in real estate investment, with nearly 400 senior executives attending last year's event. November's Forum will continue to showcase the cutting-edge strategies utilised by Europe's most successful real estate funds and investors through structured presentations, panel discussions and interactive audience participation. Russell Kett, Managing Director of HVS International's London office, will be a panellist in a session dedicated to hospitality real estate, entitled 'Finding Value in Hotel and Leisure Properties'. To view the full agenda or to register for this event, you can visit the website www.imn.org/a532 or telephone +1 (212) 768-2800.

Pandox - The share price performed positively following the company's trading statement with signs of further improvements in the forthcoming quarter.
Hilton Group - Despite Hilton reporting third-quarter results in line with analyst expectations, the stock market reacted negatively following the company's statement that it may not see the benefit of any real market improvements until 2004.
NH Hoteles - The share price declined following the company's latest trading announcement that its net profit for nine months had halved.

For the latest in the hospitality industry, please visit:

www.hvsinternational.com

You are also welcome to contact the following personnel at HVS International's London or Madrid (Laurent de Kousemaeker) offices.

Russell Kett, MD at rkett@hvsinternational.com
Charles Human, MD Investment Services at chuman@hvsinternational.com
Simon Hudspeth, Director at shudspeth@hvsinternational.com
Dominique Bourdais, Director at dbourdais@hvsinternational.com
Christopher Mumford, MD Executive Search at cmumford@hvsinternational.com
Laurent de Kousemaeker, Director at ldekousemaeker@hvsinternational.com