CBRE GI snaps up London hotel for £160m

The real estate investment management business of property services firm CBRE bought the Waterloo-based asset on behalf of a club deal formed for a selection of its pension fund clients. 

CBRE Global Investors (GI), the real estate investment management business of property services firm CBRE, has purchased the Park Plaza Hotel in London’s Waterloo district for £160 million ($207.6 million; €182 million).

The hotel was acquired through a club deal featuring ten of CBRE GI’s pension fund investors, though the firm did not disclose their identities.

The property has 494 bedrooms and is equipped with restaurants, a swimming pool, a gym, a spa and a business center. It is located around 350 meters from Waterloo station and is within walking distance of a number of tourist destinations, including The London Eye and the London Aquarium.

The seller was PPHE Hotel Group which has committed to a sale and leaseback arrangement through the entity that owns the hotel, Waterloo Hotel Holdings, CBRE GI said.

The initial rent, the firm added, of over £5.6 million will be reviewed annually against the Retail Price Index.

CBRE GI was asked to provide performance expectations for the acquisition, but by press time this had not been disclosed.

“This bespoke deal has been created as a club deal to suit the specific requirements of ten of our pension fund clients. These clients are seeking long-term investments with inflation-linked income derived from prime assets, and we would expect this to be held long-term,” Michael Ness, head of UK, CBRE GI said.

“This is an attractive investment opportunity in the heart of London on a site with high residual value, but also leased to a major global hotel operator, offering considerable security. We feel that we have acquired an asset that will provide our clients with a robust and reliable income stream over many years,” Ness added.

In one of its most recent European deals, CBRE GI acquired the H20 Rivas Shopping Centre in Madrid in May for an undisclosed price. The deal was the seventh and final investment made on behalf of its European Co-investment Fund (ECF), CBRE GI’s European-focused value-add platform.