HIG Capital has mandated Savills and Cushman & Wakefield with the sale of the freehold of Morley House, a hotel development site with more than £250 million gross development value.
The private equity investor 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.
On the Holborn Viaduct, not far from Goldman Sachs’ London head office and Amazon Web Services, the site has planning in place, and allows for circa 150,000 square feet.
The 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.
“We believe there is substantial investor demand for such high-quality product also in light of the lack of supply in key markets in London and the exceptional [average daily rate] growth in 2023 and projected for the next few years,” said Rob Stapleton, head of hotel capital markets at Savills.
“Opportunities for buyers to shape a ground-up hotel development to their specific brand-requirements are few and far between,” said Richard Candey, partner at Cushman & Wakefield. “Operationally, London hotels have continued to outperform and we’ve seen this translate into positive investor engagement and pricing levels.”