LONDON—Privately owned, United Kingdom-based investment company Topland Property Group in early December acquired Menzies Hotels for £85 million ($139 million).
In the deal, Topland, led by brothers Eddie and Sol Zakay, bought 12 of Menzies’ portfolio of 15 properties. Menzies Hotels was in the process of administration proceedings, the U.K. equivalent of the United States’ Chapter 11 bankruptcy.
The Menzies’ hotels range in size from the 18-room Menzies Woburn Flitwick Manor in Bedfordshire, England, to the 212-room Menzies Aberdeen Airport in Scotland, highlighted by the 78-room Menzies Welcombe Hotel Spa & Golf Club in Stratford-upon-Avon, the birthplace of William Shakespeare. The deal is credited with having saved 1,200 jobs, and hotel management company Bespoke Hotels has been contracted to run the properties.
Tom Betts, Topland’s director of structured finance, told Hotel News Now that Menzies had only been in administration for approximately four weeks. Topland considered the acquisition suitable because it already had exposure in the hotel market, including owning the celebrated Royal Crescent Hotel & Spa in Bath, England.
Other properties already in its portfolio include the Metropole, Brighton; Hilton Glasgow and seven Thistle hotels—six in London and one in Edinburgh.
The Menzies Hotel group was bought with cash, according to Betts.
“We want to build up a portfolio, and we’re even considering an element of branding, as we feel we have the right opportunities to add value,” he said.
Topland decided not to purchase three of the Menzies’ properties because they were not freehold and were loss-leading, Betts explained.
The bigger picture
The purchase is part of Topland’s strategy to build a hotel portfolio of approximately £1 billion ($1.64 billion), although how that exactly will be finalized is still in the discussion stage. Betts hinted that Topland wants to reach that goal by the end of 2014, although “it might take a further year.”
All of the properties acquired from Menzies are located in the U.K.
“We are very much supportive of regional U.K. markets, and of course we’re looking at well-managed and -located hotels. (The 12 hotels Topland did purchase) were income-producing, and we felt that businesses could be run from them. That said, we’ve got certain views how to improve them,” Betts said.
Betts added that the properties will have injections of capital expenditure but that “to be fair to the previous owners, they had spent money where it was needed.”
No decision has been made on whether the Menzies name will be chiseled off the front of the hotels.
“The properties might not sensibly sit in one brand, but that is a decision unlikely to be made until we have gone along the acquisition trail,” Betts said.
He also said Topland has traveled abroad in the possibility of expanding the portfolio.
“We’re focusing on the U.K., but if we can find trophy assets abroad, then we are very interested,” Betts said.