Cycas-Patron JV sells Stratford City hotels

Amsterdam-based Cycas Hotel Partners speaks to PropertyEU about the joint venture's sale of two flagship hotels at Westfield Stratford City.

The Patron-Cycas joint venture has completed the sale of its two flagship hotels at Westfield Stratford City in East London, at the gateway to the Olympic Park.

Eduard Elias, partner at Cycas Hotel Partners, told PropertyEU that the unnamed buyer is based in Asia.

The sale price of £58 mln (€71 mln) represents £165,000 per room and a forward 2013 cap rate of 6.9%.

The hotels, which are branded as a Holiday Inn and a Staybridge Suites hotel, have a total of 350 rooms and an area of 17,300 m2. InterContinental Hotels Group (IHG) will retain the franchise agreement for both properties and the hotels will continue to be managed by Cycas Hospitality, a 100% subsidiary of Cycas Hotel Partners.

'The hotels have only been open since May 2012 so this is a very good cap rate in that regard,' Elias aid.

'Obviously, we could have held on to the assets for a few more years but this wasn't necessary as the hotels are doing well - though they are still ramping up - and we got the price we wanted.’

London, he said, was still viewed as a save haven, and Westfield Stratford City has already proven itself as an attractive location for international investors. Pension giants CPPIB of Canada and APG of the Netherlands acquired 50% of the retail component at Westfield Stratford City for about €1 bn in November 2010.

Several investors expressed an interest in the hotels assets that were marketed by CBRE Hotels EMEA.

Patron Capital, which owns a portfolio of 44 hotels, acquired the two properties in January 2011, in a joint venture with Cycas, as a forward funded transaction from the shopping centre developer Westfield.

Josh Wyatt, investment director of hospitality at Patron Capital, said: 'Acquiring these hotels in early 2011 was Patron's vote of confidence in an unproven investment zone. With the arrival of Westfield Stratford City and the Olympic Park, followed by the ongoing investment in the area, these hotels are now in an internationally recognised location and at the centre of significant facilities for retail, business and the community.'

Owen Pritchard of CBRE Hotels added: 'The hotels received unexpected considerable interest from UK and overseas buyers who were attracted by the quality of the product and the location in London's largest urban regeneration project.'