Frogmore, the London-based real estate investment manager, is looking to sell its 80 bedroom boutique London hotel for around £80 million (€109 million; $123 million).
The five-star South Place Hotel is leased to restaurateurs, D&D London, which operates London restaurants including Quaglino’s and Coq D’Argent. D&D added Michelin Star restaurant, ‘Angler’ to the top floor of the South Place and have 32 years remaining on their lease.
Originally Frogmore, using capital from its first fund Frogmore Real Estate Partners I – a 2006-vintage £330 million vehicle, acquired the site and obtained planning permission to build an office property.
However, the firm changed its strategy due to the global economic crisis and decrease in demand for commercial space.
“We are very proud of what we have accomplished at South Place Hotel with D&D London,” said Jo Allen, chief operating officer at Frogmore. “It has been fantastic to see it come to fruition and now return the equity to our investors, for our next move.”
Gerard Nolan and Partners has been appointed as agents to find investors to buy the freehold investment.
“The long-term guaranteed income is a rare find in such a beautiful asset. The sale price also reflects great value, at £1,250 per square foot,” commented Gerard Nolan.
Back in July Frogmore held a £400 million final close on its third fund – Frogmore Real Estate Partners III – after allowing more investors into the fund.
The firm had already beaten its original target of £350 million after holding a close on £377 million for the fund back in June. But, after receiving the go-ahead from its investors Frogmore took in another capital commitment and injected a further £7.5 million in co-investment capital.