Chow Tai Fook in HK$1.6b deal to buy Marriott London Grosvenor Square Hotel
Group and partners bank on British tourism boom as they snap up luxury Mayfair hotel
The prospect of high returns and a British tourism boom prompted Chow Tai Fook Group and some partners to snap up a luxury hotel in central London for £125.15 million (HK$1.6 billion).
The 237-room Marriott London Grosvenor Square Hotel is next to the US embassy in exclusive Mayfair and rooms go for about HK$2,500 a night.
The deal works out at £528,000 for each room, making it the second-most expensive hotel deal in London this year in terms of price per room.
New York-listed Strategic Hotels & Resorts announced it had sold the hotel to an affiliate of Hong Kong-based private equity firm Joint Treasure International. Daniel Yiu, senior adviser at Joint Treasure, said yesterday that he, Chow Tai Fook Group and some partners had bought the hotel.
"The hotel is located in the centre of the city centre, the best of the best," he said. "It could offer a yield of more than 6 per cent. We are optimistic on the market outlook and the tax rates are lower than in the United States.
"Although the hotel has a ground lease with only 43 years left, that is still more than the hotels in China with only 40-year land tenure. And about 70 per cent of the properties in the area are leasehold."