HIG readies £115m Hilton Docklands hotel sale

By James Buckley - Wednesday, July 08, 2015 15:00

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HIG’s Bayside Capital is preparing to put its 4-star Doubletree by Hilton hotel in London’s Docklands up for sale for as much as £115m in a move which could book its owner a more than twofold profit in just over a year, CoStar News can reveal.

Bayside has asked agents to pitch for the instruction to sell the 378-bed hotel which has resulted in an upper pricing expectation of £115m. While agents have yet to be instructed, a sale at that level would represent a net initial yield of c.5% and a 159.5% premium to the price Bayside Capital paid for the property last year.

According to documents filed with the Land Registry, HIG Luxembourg Holdings 42 Sarl paid £44.31m for the property at 265 Rotherhithe Street, SE16, in May 2014, secured by an AIB loan. Bayside Capital, the mid-market credit arm of HIG Capital, acquired the Hilton hotel citing significant potential to improve the asset through additional investment amid a drive to grow its European Real Estate business further.

The 147,168 sq ft Docklands Riverside hotel sits on the bank of the Thames with views across Canary Wharf and 22,075 sq ft floorplates. The former 17th century Wharf Building sits on the site of London’s last dry dock for shipbuilding. The hotel includes 9,286 sq ft of event space and 15 meeting rooms, as well as its Millennium Suite connecting to a terrace regularly used for wedding receptions of up to 160 guests.

The decision to sell comes as the Europe, the Middle East and Africa (EMEA) hotel investment market is gearing up for another bumper year.

EMEA is projected to see close to $25bn in hotel trades in 2015 – up from $21.5bn in 2014 and representing 36% of all hotel transactions globally, according to JLL.

Much of this activity will be driven by large single-asset transactions, led by London and Paris, while portfolio deals are anticipated in the UK and Germany. The UK, Germany and the US represent the biggest destinations for private equity capital globally.

Bayside Capital invests across several segments of the primary and secondary debt capital markets. The firm is active across industries, including business services, manufacturing, healthcare, retail, food/agriculture, and specialty finance.

jbuckley@costar.co.uk

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