Ong Beng Seng Sells London Hilton Olympia For £130m
Main Photo: The Hilton London Olympia
Date: April 2022
Name: Hilton London Olympia
Location: Kensington High Street, Close to Olympia, London, England, UK
Number of Keys: 405
Seller: Hotel Properties Ltd, which is 55.4 percent owned by Ong, in a joint venture between the SGX-listed firm and a private vehicle controlled by Ong Beng Seng, it’s largest shareholder
Buyer: Frogmore & C1 Capital
Singapore property tycoon Ong Beng Seng is raising some cash as the hospitality investor’s primary publicly traded vehicle announced the sale of the London hotel over the weekend.
HPL – Hotel Properties Ltd, which is 55.4 percent owned by Ong, said on Saturday that the joint venture has agreed to sell the Hilton London Olympia and it’s operating company for £40.8 million (SIN$53.2 million). Although reports from EIN Newsdesk suggest the price paid was £130m – which seems about right!…by a JV between Frogmore and C1 Capital
In the same deal the JV also acquired the Park Inn by Radisson Northampton for £15m and Stifford Hall near Thurrock for £7.2m as part of a newly formed joint venture to pursue a hotel recovery portfolio strategy. These acquisitions form the second tranche of acquisitions for its fourth value add fund, FREP IV. Previously Frogmore acquired interests in Galliard Homes and three of their London residential developments for FREP IV.
With a combined total of 643 keys across the three hotels, Frogmore and their partners have committed c£70m equity to the projects. Each hotel will be repositioned and rebranded or extended to maximise potential. Hilton London Olympia in particular offers extensive opportunity.
“Our strategy is to source hotels which are under performing or in need of capital expenditure in order to revitalise the offering and improve the hotel performance,” said Jo Allen, Chief Executive at Frogmore. “We’ve worked alongside Gerard and his colleagues at C1 Capital for nearly 20 years and are delighted to be partnering with them on this initiative.”
Gerard Nolan, Chairman of C1 Capital said, “Our long-term partnership creates the perfect union of Frogmore’s development skills and their ability to gain planning consent with our operational skills to improve the assets. As a team we’ll continue to identify hotel assets that can be repositioned and/or redeveloped.”
“Several aspects attracted us to the Hilton London Olympia,” continued Nolan. “Occupying a prominent location on Kensington High Street, the 405-bedroom hotel is also adjacent to Olympia, which is currently undergoing a £1.3bn redevelopment expected to attract an extra £9m per year to the local economy.”
The 80:20 JV of HPL and Ong’s Como Holdings anticipates a gain of SIN$29 million (US$21.3 million) from the disposal of the hotel near the Olympia Exhibition Centre at the western end of Kensington High Street, the company said Saturday in a filing with the Singapore Exchange.
The sale of the 405-key property comes as Cuscaden Peak, a consortium led by Ong and backed by units of state holding firm Temasek, prepares to acquire the real estate assets of Singapore Press Holdings for SIN$3.9 billion (US$2.9 billion) after a takeover battle against Keppel Corp.
While HPL is booking a gain on the sale of the property near London’s Olympia Exhibition Centre, the deal represents a more than 64 percent mark-down on the £114.85 million that the joint venture had paid to acquire the property in August of 2017. At the stated compensation, HPL is achieving a rate of £100,740 per key for the hotel.
HPL, where Ong serves as managing director, announced the sale of the London property less than one week after the company released its annual report, which showed a loss attributable to owners of the company in 2021 of SIN$7.7 million on revenues of SIN$344 million.
While that result represented the second straight year of losses for the firm, the final figure was a marked improvement over the group’s SIN$177.5 million loss on revenue of SIN$259 million in 2020. At the end of 2021 HPL had current liabilities of SIN$276 million against current assets of SIN$287 million, with the company currently nearing completion on a pair of office projects in central London, Paddington Square and phase one of Bankside Yards.
While Ong’s hotel firm, which is best known for its portfolio of Hard Rock hotels and cafes, as well as the Six Senses resort chain, has been struggling, the tycoon’s joint effort with Mapletree Investments and CapitaLand to buy out the non-media business of Singapore Press Holdings was a major win.
Including the Hilton London Olympia, HPL owns stakes in a portfolio of 39 hotels and resorts across 15 countries, according to its annual report, including the Four Seasons Singapore and the Hilton Singapore, as well as venues operating under the Hard Rock, InterContinental and Marriott brands.
Together with wife Christina, Ong has a net worth of US$1.71 billion, according to estimates by Forbes, which placed the couple at No.25 on its most recent Singapore rich list.
HPL’s sale of the Hilton London Olympia comes at a time of furious buying and selling in the UK capital’s property market, driven largely by Asian investors.
Last week, Mingtiandi reported that Chinese state-owned developer Poly Global had sold its 5 Fleet Place office building in the City of London for £191 million ($250.6 million), with veteran Hong Kong politician James Tien emerging as the new owner.
In March, Guangzhou R&F Properties agreed to sell its Vauxhall Square mixed-use project to Hong Kong-based Far East Consortium for £95.7 million ($124.8 million), with the cash-strapped developer expecting to record a loss of more than £68.8 million ($89.9 million) on the disposal.
Price: £130m
Price per Key: £321k
THPT Comment: Varying reports on the price paid – Singapore media suggests £40.8m which is ludicrously low….we suspect higher figure of £130m is much nearer the mark. The hotel, which was not in the best of shape, will be losing it’s competitive edge for business coming from Olympia, which is undergoing a £multi-million with both a Hyatt Regency and a CitizenM opening in 2023/24
First Seen: Mingtiandi…and EIN News Desk
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