PPHE acquiring prime London site for hotel development

(Sharecast News) - PPHE Hotel Group has announced the acquisition of a prime development site near the City of London, where it plans to build its first Radisson RED select service hotel in the capital. The FTSE 250 company said the project, due to open in 2029, would be developed via its European Hospitality Real Estate Fund, and marked the second property acquisition under the fund's strategy.

It said the 13,000 square metre mixed-use site, located close to Tower Bridge and Liverpool Street Station, came with planning permission.

The property would feature at least 182 hotel rooms under the Radisson RED brand, alongside a restaurant, bar, gym, and around 41,000 square feet of office space.

PPHE said the total investment was expected to be around £90m, including a site acquisition cost of £17.5m.

The project was targeting a high single-digit unlevered yield at stabilisation and would pursue a BREEAM 'Excellent' environmental rating.

"This site will be a great addition to our development pipeline as we continue to extend our portfolio and presence in the London market," said PPHE co-chief executive officer Greg Hegarty.

"It is an exciting project which leverages our 'buy, build, operate' business model and expertise as well as our multi-brand and multi-market segment strategy.

"We look forward to bringing Radisson RED to central London, following our recent Radisson RED openings in Berlin and Belgrade."

The transaction was expected to complete in the coming months, subject to standard conditions.

Once approved, PPHE said it intended to fund the development through construction finance, consistent with its past project approach.

The planned hotel would extend PPHE's existing London footprint, which includes Park Plaza properties and premium lifestyle hotels such as art'otel Hoxton, art'otel Battersea, and the Holmes Hotel on Chiltern Street.

At 1015 BST, shares in PPHE Hotel Group were flat at 1,566p.

Reporting by Josh White for Sharecast.com.