Israel-based Clal Insurance is investing £113.7m (€133m) to buy a 49% stake in two London hotel assets owned by PPHE Hotel.
PPHE Hotel has teamed up with Clal to form a special purpose company to hold the Park Plaza London Riverbank and the Art’otel London Hoxton development.
PPHE said it will retain a 51% stake in the venture and will receive Clal’s £113.7m as part of the deal to enable it to pursue new opportunities to accelerate growth.
The Riverbank asset is a 646-room hotel located on the Thames. The 27-storey Hoxton development at Shoreditch is due to complete in the first quarter of 2024.
PPHE said the deal values Riverbank and the all-in development cost budget of Hoxton at £542.3m.
Eli Papouchado, chairman and founder of PPHE Hotel, said: “Clal’s investment reflects our mutual confidence in the strength of the London hospitality real estate market. 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.”
Boris Ivesha, president and CEO of PPHE Hotel, said: “London is one of world’s most resilient hotel and real estate markets and it typically rebounds quickly after downturns, largely due to its wide appeal to tourists and business travellers alike. We are delighted to see signs of growth and recovery already in the UK market.”
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