£105m hotels sale falls through

08 January 2002 by
£105m hotels sale falls through

The £105m sale of London's Strand Palace and Regent Palace hotels to London & Regional Properties has collapsed.

The failure means that contract caterer Compass Group is still to shed all the unwanted hotel assets it acquired when it merged with Granada in May 2000.

But Compass, which also owns the Travelodge budget hotel chain, denies that the news is a major setback.

A Compass spokesman said: "This is a small part of the overall sales process. We're very relaxed about it."

The hotels are being managed through the Travelodge team but the spokesman stressed that converting them into Travelodges had been ruled out. The hotels would eventually be sold although they were not currently being actively marketed, he added.

The sale to London & Regional, announced in March last year, had been conditional on landlord's consent. However, this is not thought to have been a key stumbling block.

While London & Regional had run into some problems with obtaining approval from the freeholders of the properties for alterations, a property industry source said 11 September had also played a part.

The Strand Palace is a 785-bedroom three-star hotel close to Aldwych on the Strand. The Regent Palace is a 919-room property overlooking Eros on Piccadilly Circus that is described as "value for money".

The Regent Palace is on a short lease - understood to be single figure years - from the Crown Estates and it sits on a piece of land earmarked for development.

The Strand Palace freehold is owned by Freshwater and is a more attractive proposition for most upmarket hoteliers. Last summer there was speculation that Hyatt was eyeing the site as a possible replacement for London's Carlton Tower hotel that has now been rebranded Jumeirah International.

by Andrew Sangster

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