Henderson Park enters third hotel market with £500m deal

Henderson Park has entered its third European hotel market following the acquisition of two Hilton Metropole hotels, in London and Birmingham, for a fee understood to be around £500 million.

The London Hilton Metropole, located close to Paddington Station, in the west of the city, is the UK capital’s largest conference hotel and second largest by room count, with 1,059 rooms and 42 conference and meeting rooms. The asset is also close to the new Crossrail train link.

The Birmingham Hilton Metropole is the UK’s largest hotel outside of London, offering 790 rooms and 33 conference and meeting rooms. It is located at Birmingham’s National Exhibition Centre and adjacent to the city’s international airport and future HS2 train station.

The firm did not disclose the individual prices of the two hotels, but it is understood the combined cost was around £500 million. The seller was also not revealed.

Hilton will remain as the hotel’s operator while Henderson Park will act as the asset manager, a spokesman for the firm said.

Nick Weber, founding partner of Henderson Park, has a strong track record in hotel investment, having previously bought and then, in 2015, sold Jury’s Inn hotel group for £680 million in a deal for his previous firm, Mount Kellett, which generated a 90 percent-plus IRR and a 3.25x equity multiple, PERE understands.

Performance targets for the two Hilton Metropole assets were requested but not disclosed.

“Through this transaction we have acquired two of the UK’s largest hotels and conference centers and we’re thrilled to mark Henderson Park’s entry in to the UK hotels market with the purchase of such landmark assets,” said Weber.

“While these latest additions to our portfolio provide us with assets of substantial scale and pre-eminence in prime locations in the UK’s top two cities, they also offer a number of opportunities to enhance value through our own asset management,” added Weber.

The double Hilton Metropole acquisition not only marks Henderson Park’s first foray in the sector in the UK, it also means the firm has broken into three hotel markets since November last year, when it bought Paris’s largest hotel, Le Méridien Étoile, for around €365 million. This was followed by the June purchase of The Ledra, a 5-star hotel in Athens, for €33 million.

Henderson Park’s latest acquisition means the firm has now invested around €900 million in European hotels since November.

Weber launched Henderson Park in September last year after receiving $500 million of backing from Greenwich, Connecticut-based private equity firm Stone Point Capital, sovereign wealth fund Kuwait Investment Authority, and New York and Kuwait-based investment manager, Wafra Investment Advisory Group.

For the Hilton Metropoles deals, Jones Day acted for Henderson Park while CBRE acted for the seller.