HIG has sold the freehold interest of Morley House, 26–30 Holborn Viaduct, EC1, a £250 million London hotel development opportunity.
Altius Real Estate has paid £60 million for the asset, reflecting £420 per square foot.
Savills, which advised HIG alongside Cushman & Wakefield, said there had been strong demand throughout 2024 from value-add investors seeking opportunities to convert offices to alternative use classes and the sale of Morley House had proved the "sustained depth of demand".
On the south side of Holborn Viaduct, the site is vacant and has a planning consent for a 274-key hotel development with massing potential for 142,790 square feet across basement, ground and 11 upper floors.
HIG Capital gained control through a £76 million mezzanine loan it provided in 2022 to Shiva Hotels, which was backed by two new hotels and two developments in Central London, including Morley House, as reported. At the time, the existing debt from ICG and Bank Leumi of around £130 million was extended. There was around £100 million of equity in the deal.
The site is not far from Goldman Sachs’ London head office and Amazon Web Services.
The consented scheme proposes the demolition of the existing building and development of a hotel with 11 floors over ground on the site of 26-30 Holborn Viaduct. The development was originally to have 226 rooms and a rooftop bar.
Savills reports that January saw £440.1 million of turnover across five deals in the City offices market, reflecting an average lot size of £88 million and the highest monthly turnover seen in the City market since December 2023.
It added: "The month’s turnover volume surpasses the combined total for the whole of Q1 2024, and also included two deals in excess of £100m following a challenging 2024, which saw only four deals in this lot size range throughout the entire year."