In the hotel sector, deals have been few and far between since interest rates began to rise, driving a wedge between bidding and asking prices. Against such a backdrop, heads were turned when one of Scotland’s best-known hotels changed hands in the largest UK hotel deal of the year to date.
In July, London-based manager Henderson Park Capital Partners, together with its in-house operator and asset manager Klarent Hospitality, acquired the Waldorf Astoria Edinburgh – The Caledonian in a deal valuing the property at £85 million ($110 million; €99 million).
The asset was sold by Abu Dhabi-based investment company Twenty14 Holdings, which reportedly paid the same price for the hotel in 2018.
Recent years have proven an uncomfortable stay for hotel owners, with doors forced to close for large periods of the covid pandemic, but the deal underscores investor confidence in the sector. For Henderson Park, that confidence is particularly strong in the Scottish capital. Indeed, this is the third Edinburgh hotel acquired for Henderson Park’s Klarent Hilton portfolio, with the manager having acquired both The Carlton and the Doubletree Edinburgh Airport in a 12-hotel portfolio deal in 2021.
According to the Office for National Statistics, visitor numbers to UK cities are recovering close to pre-pandemic levels: Edinburgh recorded around 1.8 million overnight visits last year, compared with 2.2 million in 2019. To capitalize on the recovery of demand for business and leisure travel, Henderson Park will invest in The Caledonian through room renovations and by upgrading and restoring public areas and facilities.
Scottish hospitality
Built in 1903, the hotel was originally owned by the Caledonian Railway Company, and provided luxury accommodation for passengers disembarking from the London mainline at Princes Street Station. When the station was demolished in the 1960s after the railways were nationalized, the hotel was the only part of the complex that survived.
Princes Street is now Edinburgh’s principal retail thoroughfare, with the city’s main business district and International Conference Centre a short walk away.
Although no longer a railway hotel, the property retains its Caledonian moniker as a mark of its heritage, and is known locally as ‘the Caley.’ Notable guests to the hotel and its grand dining room, The Pompadour, have included the late Queen Elizabeth II, former US president Barack Obama, and legendary actors Laurel and Hardy, Judy Garland, Charlie Chaplin and Gene Kelly.
If the red sandstone walls of the five-star hotel could talk, they would celebrate the longevity of its purpose as a hotel throughout 120 years of major sociopolitical and economic change. Outdated properties are constantly being repurposed in today’s environment, but The Caledonian’s new owners are confident there is life in the old building yet.
Timeline
1903
The Caledonian Hotel is built by the Caledonian Railway Company on Princes Street, Edinburgh2000
Hotel acquired by Hilton International from Queens Moat Houses for £44.2 million2012
Hilton spends £24 million to refurbish the property; relaunches it under the Waldorf Astoria brand2018
Twenty14 Holdings buys the property for around £85 million2023
Henderson Park buys the hotel for £85 million
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