HVS EMEA Hospitality Newsletter – Week Ending 3 September 2010

KINGDOM SELLS ITS SHARE IN CAIRO HOTEL | Dubai-based real estate investment company Kingdom Hotel Investment (KHI) announced the recent sale of its 43.7% minority share in the Four Seasons Hotel Cairo at Nile Plaza to Arab Company for Hotel and Tourism Investments (a subsidiary of the Egyptian-based Talaat Moustafa Group) for US$145 million. Four Seasons Hotels and Resorts will continue to manage the 366-room hotel. Commenting on the sale, Sarmad Zok, KHI’s chief executive officer, said: “I am very pleased with this transaction which is executed in line with our stated strategy of value realization. This divesture unlocks significant capital and we will continue to consider the sale of minority stakes to consolidate the portfolio.”

BUYER SOUGHT FOR THE BERNERS HOTEL LONDON | After falling into administration in August of this year, the Berners Hotel London, which was previously owned by JJW Hotels & Resorts, has been put on the market for £60 million. The 193-room freehold property, in London’s West End, has a long history: in 1654 Josias Berners, who gave the hotel its name, bought the land on which it now stands for £970. In 1835, five houses were built on the plot and these were later converted into the hotel at the beginning of the 1900s. The business then closed in 2006 to undergo an extensive refurbishment and it now lies vacant, waiting for a new owner to complete the work on the interior of the building and restore the hotel to its former glory.

HOW TO VALUE HOTELS IN THE CURRENT MARKET | HVS London is planning a series of half-day seminars during the autumn that will address this important topic, and we welcome hearing from you as to which location you would prefer to join us at for one of the events. Please email our director of valuations, Tim Smith at [email protected] with your preferred city – choosing from London, Glasgow, or Manchester in the UK and Paris, Madrid, Berlin, Frankfurt, Amsterdam, Brussels, Dublin, Prague, Geneva or Rome in continental Europe – and indicate your first and second choice. Please add the names and email addresses of anyone else in your organisation who you consider should also attend. We look forward to hearing from you soon and to welcoming you to an HVS European Valuation Seminar in the near future.

OPPOSITES ATTRACT IN EDINBURGH | An opportunity has arisen this week to purchase two boutique hotels that are located opposite each other on the same road in the city of Edinburgh, Scotland. Derek and Shirley Mowat have owned and operated the Dunstane House and the Dunstane City Hotel since 1998, and they are seeking offers in excess of £5 million for both properties. The building which now houses the 16-room Dunstane House was originally constructed as a private home in 1852, and it was designed by famous Edinburgh architect William Playfair. The 18-room Dunstane City Hotel has undergone a major refurbishment programme during the past couple of years.

A PARK INN WEEK FOR REZIDOR HOTEL GROUP | The southwest Russian city of Sochi is to gain a Park Inn property as part of the strategic development agreement, signed in 2009 between Rezidor Hotel Group and St Petersburg-based hotel management company Regional Hotel Chain, which will see 20 Park Inn properties established in major cities across the country. The 160-room Park Inn City Centre Sochi is expected to open in 2013 adjacent to Sochi’s main railway station, just in time for the Winter Olympic Games, which are to be held in the city in 2014. Rezidor currently has two Radission hotels in operation in Sochi, and a further three hotels (including the new Park Inn) in the pipeline for the area. This week, Rezidor also announced the opening of a new Park Inn hotel in Norway: the 300-room Park Inn Oslo Airport, which is directly linked to the airport terminal, 35 km northeast of Oslo. This is Rezidor’s sixth Park Inn property to open in Norway and its third for the city of Olso.

A LAID-BACK BOVINE ADVENTURE IN WARWICK | Birmingham-based pub/restaurant management company Urban & Country Leisure Ltd (UCL) has announced that it is to expand into the hotel market. UCL has invested a total of £1.5 million in transforming the former 19-room Globe Hotel in the town of Warwick, central England, into a 16-room boutique hotel. The new property, to be named The Lazy Cow, is scheduled to open this October, and if guests are feeling particularly idle they won’t have to go far to find refreshment as the business will include an onsite pub/restaurant. Expect more from UCL in the future, however, as this project is the beginning of a £15 million two-year expansion plan which will see the company further expand its portfolio in 2011 and 2012 with another ten boutique hotels and 12 pubs and restaurants. Readers in England, look out for a slothful sheep arriving in a town near you.

BELGIUM SAYS BONJOUR TO EUROPE’S FIRST ALOFT | The beginning of September marked the opening of Starwood Hotels & Resort’s first Aloft-branded property in Europe. The 147-room Aloft Brussels Schuman, which is owned by London-based property development company Thornsett Group, is located in the EU district of Belgium’s capital, and it is Starwood’s fifth hotel in the city. With this opening, Aloft now has a presence in six countries, across four continents.

MEET THE NEW FOUR SEASONS ON PARK LANE | Four Seasons Hotels and Resorts has announced that it will be returning to London’s iconic Park Lane this winter. The Canadian-based group first graced London’s Mayfair district with the Four Seasons Inn on the Park, which was opened by Princess Alexandra in 1970. The Four Seasons Hotel London, on the site of the original property, closed its doors more than a year ago to undergo an extensive renovation programme. The hotel has emerged from the ashes of this refurbishment to be reincarnated as the Four Seasons Hotel London at Park Lane, with a brand new tenth floor housing a rooftop spa and fitness centre.

HILTON WORLDWIDE CONVENES AT THE LOWEST POINT ON EARTH | At the nadir of the earth, the Dead Sea, on Jordan’s east coast, lies the King Hussein Bin Talal Convention Center. This convention centre has historically operated alone in the salty depths; however, back in May of this year, Hilton Worldwide signed a management agreement with Dead Sea Resorts PSC for the 285-room Hilton Dead Sea Resort & Spa, which is currently under construction adjacent to the centre and scheduled to open in the fourth quarter of 2013. And this week US-based company announced that the conference centre has finally been welcomed into the family: Hilton has taken over the management of the business and will operate it under the Hilton Hotels & Resorts brand.

GLADEN’S TIDINGS | The news from Spain by Esther Gladen, Business and Market Intelligence Analyst, HVS Madrid. Cordial Canarias Hotels & Resorts is to manage a new property on the island of Tenerife: the company has added the four-star, 174-room Golf Plaza in San Miguel de Abona, in the south of the island, to its portfolio of five properties on Gran Canaria. Iberostar takes over the Coral Beach Marbella from Occidental Hoteles: the 170-room property, owned by Pontegadea Inmobiliaria (Amancio Ortega), will be completely refurbished during the winter months and will reopen in April 2011, under the management of Iberostar. With this step, Occidental Hoteles continues to reduce its portfolio in Spain, with now just four hotels in Madrid, Barcelona and Lanzarote. Husa adds the 156-room former Hesperia Alicante Golf to its catalogue: the four-star hotel, in San Juan, will be leased by the company and operated under the name of the Husa Alicante Golf & Spa.

• InterContinental Hotels Group (IHG) – Morgan Stanley upgraded IHG to "overweight".
• NH Hoteles – During the past week, NH Hoteles remained unchanged on low volume, ending a two-day streak of rises.
• Sol Meliá – This week, Sol Meliá strengthened above its trend; the 200-day moving average price was €5.90.