£1B Hotel Buy Shows Queensgate Loves Big, Complex Deals
Property M&A deals are never easy, but low-key investor Queensgate Investments is finding a home in big, complicated corporate property transactions.
Late last week, the company completed one of the largest UK property deals of the past few years with the purchase of four Grange hotels in London from the Matharu family for £1B.
The three Matharu brothers who started the Grange hotel business in the 1980s — Raj, Harpal and Tony — decided to sell the four hotels after a family row which has resulted in litigation, according to The Times. They first looked at options to sell the hotels in 2016, Estates Gazette said.
Queensgate founder Jason Kow described the deal to The Times as “an odyssey” that was “longer and more complicated” than expected because of the dispute and Brexit.
The company has completed acquisitions totalling £2.2B, according to Real Capital Analytics. It bought serviced office company London Executive Offices for around £260M in 2013, much less than previous owner Morgan Stanley paid for it, but then took more than two years to sell it to a private Asian investor. In that time the price for the 33 sites it owned and leased dropped from £700M to £475M.
It bought the third-largest hotel in London, the Forum in Kensington, for £400M in 2015, acquiring it from Apollo immediately after the private equity firm had completed a wider portfolio deal.
It also bought the pan-European Generator Hostel business from Patron Capital for £384M in 2017, making it one of the largest players in the emerging budget hostel sector.
The company is backed by a number of family offices which gather up money from rich investors in the Middle East and Asia. These include that of Kow himself; Alvarium Investments, previously know as LJ Partnership; Hong Kong’s Peterson Group; and Dilmun from the Middle East.
The four hotels in its most recent deal are in the City, Holborn, St. Paul’s and Tower Bridge and total 1,300 rooms. Three will be rebranded under the Leonardo Royal brand, with the Holborn property being operated under Leonardo’s new lifestyle brand, NYX.
Société Générale, Carlyle and Cheyne Capital provided debt to complete the deal. HFF advised on the sale.
