Europe’s luxury hotel segment received a jolt this week with the sales of the Waldorf Astoria Edinburgh – The Caledonian and the Mandarin Oriental Hotel, Barcelona. JLL brokered both deals.
The Waldorf Astoria Edinburgh – The Caledonian was acquired by Henderson Park, the private real estate investment fund manager, along with its hospitality operator and asset manager Klarent Hospitality.
While the price has not been disclosed officially, Twenty14 Holdings reportedly sold the 120-year-old hotel for £85 million ($107.9 million).
The new owners of the 241-room hotel will reportedly invest to add value as well as improve the customer experience. The enhancements include renovating rooms and upgrading and restoring public areas and facilities.
This is Henderson Park’s and Klarent Hospitality’s third hotel in Edinburgh, after the acquisition of the Carlton on North Bridge and the DoubleTree Edinburgh Airport.
Twenty14 Holdings, the hospitality division of Abu Dhabi-headquartered Lulu Group International, acquired the hotel for the same sum as its selling price in 2018 from Hilton, which continued as the hotel’s operator. Hilton is believed to have spent £24 million on refurbishment of the property, before relaunching it as Waldorf Astoria hotel.
JLL advised the seller on the deal.
“This transaction presents us with a rare opportunity to acquire an iconic hotel with an incredible 120 year heritage that is part of the very fabric of Edinburgh society. As custodians of this landmark property, we have a number of planned investments that will improve the guest and visitor experience and ensure the Caley retains its status as one of Edinburgh’s most emblematic hotels going forward,” said Nick Weber, CEO and founder, Henderson Park.
The hotel, which was completed in 1903, is a category A listed building and has hosted several famed guests, including the late Queen Elizabeth II and former U.S. President Barack Obama along with Hollywood legends like Charlie Chaplin, Laurel and Hardy, Judy Garland, Sean Connery and more.
The hotel’s name is derived from its original owner, the Caledonian Railway Company. Located on Princes Street, the main retail street in the city, the hotel offers views across Edinburgh and is situated close to the Edinburgh International Conference Centre.
“In the wake of COVID-19, Edinburgh has proven to be one of the most resilient real estate and hospitality markets in the U.K. Our Edinburgh Carlton hotel, for example, delivered significant revenue per room growth last year compared to 2019, which was driven by a quicker than expected recovery in overseas tourism and business travel and supported by continued strong domestic leisure demand. Our plans for The Caledonian will ensure that it remains well placed to capture this strong demand,” said John Brennan, chairman of Klarent Hospitality.
Since it was founded in 2016, Henderson Park has invested $14 billion to establish a portfolio of flagship real estate assets in Europe.
MANDARIN ORIENTAL, BARCELONA SELLS
Earlier this week, JLL also advised on the sale of Mandarin Oriental Hotel, Barcelona to Saudi Arabian investment company The Olayan Group, for an undisclosed price.
JLL represented the seller, Reig Capital Group.
The luxury, 120-room hotel is located on the Passeig de Gràcia, a shopping avenue in the city center. The hotel opened in 2010 and features a spa, rooftop pool and an indoor pool. Interior designer Patrcia Urquiola has designed each room and suite of the property.
“The Mandarin Oriental Barcelona is one of the most luxurious assets in the city, benefiting from an immaculate location and an outstanding brand. Investor appetite for the asset has been plentiful despite the challenging capital market environment,” said Patrick Saade, senior managing director of EMEA hotels & hospitality capital markets at JLL. “Investors have taken notice as luxury hotels have become an increasingly institutional investment and changing consumer preferences give rise to new investment opportunities. Hospitality is in the spotlight for investors looking to deploy capital in our ever-evolving real estate asset class.”