PPHE Hotel Group has repurchased the Park Plaza London Waterloo for £147.9m almost a decade after the hotel was disposed of in a sale-and-leaseback deal.
Park Plaza Waterloo
PPHE sold the hotel after development completed in June 2017 to a unit trust established on behalf of clients of CBRE Global Investors for £161.5m.
The deal saw PPHE enter into a 199-year lease for the property, with annual rent initially totalling £5.6m; the figure has since risen to £7.3m.
“This transaction is another excellent illustration of PPHE’s approach to capital allocation and capital recycling,” said Greg Hegarty, co-chief executive of PPHE.
“At the time, the initial sale and leaseback represented an attractive opportunity to release capital from this asset to reinvest in our broader development pipeline. Similarly, the purchase of this freehold interest is a good use of capital, protecting the group from future rental uplifts, while increasing the freehold exposure in our portfolio.
“As freehold owner, we will have increased strategic optionality on refurbishment and development, as well as benefiting from potentially better financing terms and full asset value capture.”
A new debt facility will fund £136.5m of the acquisition, secured on the freehold and long-leasehold interest in the 494-room hotel. The remaining balance will be settled from the group’s existing cash resources.
Last week, PPHE posted its annual financial results with record total revenue of £466.4m, up 5.3% from 2024. During the year, occupancy increased to 75.1% while its average room rate was up 1.7% to £164.3. Across the group, revenue per available room improved by 2.6% to £123.4.
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