Shiva Hotels to develop luxury boutique hotel collection

Shiva Hotels boss Rishi Sachdev has confirmed it is developing a number of properties across London into a luxury boutique collection.

These include Welbeck Street car park in Marylebone, which the company bought for £100m in 2016; a joint venture with the Reuben Brothers in London’s Soho; the Kingsway Hall hotel in Holborn, bought for £96m in 2014; Morley House on Holborn Viaduct; and the 53-bedroom Guardsman hotel (pictured) near London’s St James’s Park, which is set to open in Spring 2020.

Sachdev told The Caterer further expansion plans for the collection will be considered after the current raft of properties are completed.

“Our plans are to deliver these developments and get them operational before we look at the next,” he said. “I’m not saying we won’t do more. I’d very much love to – maybe one in Manhattan, one in Knightsbridge – but that will happen once these are all developed so it’s another four or five years away.”

Sachdev also outlined plans for the business after its subsidiary Hotel Income REIT is floated next month. The luxury boutique collection will sit outside of the REIT.

The company aims to raise £150m in an initial public offering (IPO), which Sachdev said will be “deployed on day one” to invest in its current portfolio of five Hilton-branded hotels in London and York. He said Shiva Hotels will invest in 10% of the REIT in part to act as a safety net for fellow investors.

“We’ll be shareholders like the rest of the REIT investors but we act as a first loss. So it’s a guarantee,” he said. “Our 10% share is the first lost if rent can’t be made.”

But Sachdev is confident that the company’s strategy of targeting university/cathedral cities where long term revenue per available room (revpar) growth is typically stronger than inflation, also makes the REIT an attractive prospect.

He said: “This means that capital value and income are growing over the long term. We’re not looking to add assets willy nilly, all over the UK, although the remit is the UK and Dublin for investment.”