PPHE Hotel Group has sold a minority stake in two of its properties to Israel’s Clal Insurance for £113.7 million.
On completion of the transaction, Clal will become a minority partner and owner of 49% of the shares in a special purpose company holding indirectly the real estate and operations of both the Park Plaza London Riverbank and Art’otel London Hoxton.
The Riverbank property is a 646-room hotel located on London’s Southbank. The development of the Hoxton hotel is due to complete in the first quarter of 2024 and will comprise a 27-story building in the heart of Shoreditch with 343 rooms and suites. The deal values Riverbank and the all in development cost budget of Hoxton at £542.3 million.
“Clal’s investment reflects our mutual confidence in the strength of the London hospitality real estate market,” Eli Papouchado, chairman and founder of PPHE Hotel Group, said.
“The agreement values these two assets at the group’s latest net asset value and the proceeds will enable the group to pursue new growth opportunities as the pandemic period subsides. The joint venture with Clal comes at a very exciting time as we look to rebuild our business, capitalising on the extensive investment programmes, which we completed just before the pandemic struck.”