Asian hotelier’s luxury London hotel up for sale

The BoTree hotel on Marylebone Lane is currently on the market

• Pramod Thomas
• 28 October, 2024

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By: Pramod Thomas

A newly developed luxury hotel near London’s Bond Street station is now up for sale following unsuccessful attempts to refinance the £375 million project, according to Bloomberg.

The five-star BoTree hotel on Marylebone Lane is currently on the market, as reported by sources familiar with the situation.

Owned by British Indian entrepreneur Rishi Sachdev’s Shiva Hotels Group, the 199-room property was constructed on the site of a former car park and cost £375m to develop. Founded in 2002, Shiva Hotels has since rebranded as Place III Hotels.

Since its opening in September 2023, Place III has been attempting to refinance the hotel, which carries around £275m in secured debt from Cale Street Partners and Crosstree Real Estate Partners. While there is no set asking price for the sale, those involved are aiming for an amount that exceeds the current debt, the report adds.

Consultant Jones Lang LaSalle Inc. (JLL) has been appointed to manage the sale but declined to provide further comments. A spokesperson for Place III indicated that refinancing efforts are ongoing alongside the sales process. Crosstree has not commented, and Cale Street did not respond to requests for information.

Shiva Hotels acquired the site for around £100m in 2016 but faced challenges during the Covid-19 pandemic and has been affected by rising interest rates.

Last year, JLL was also tasked with refinancing the BoTree and another project by Shiva in Soho. The plans included seeking £316.5m to clear the debt and an additional £12m to complete the hotel’s eighth and ninth floors. Shiva expected the BoTree to generate nearly £100m in revenue and over £28m in earnings by its third year.

The hotel has two restaurants, three bars, a VIP late-night venue, and an infinity pool terrace. Additionally, the room count can be increased to 219 by completing the upper floors.

Earlier this year, a nearby luxury hotel, the Six Senses in Bayswater, sold for approximately £1.7m per room. If the BoTree were to achieve a similar price, it would cover the outstanding debt and allow for some recovery of Shiva’s initial investment.

In February, Bloomberg reported that H.I.G. Capital, which has financed two other London properties owned by Shiva, secured equity stakes in those locations as part of a refinancing arrangement.

Shiva Hotels earlier said that a major factor in acquiring the Marylebone Lane site was its prime location near the new Bond Street Crossrail station and its prominent corner positioning in the area.

Following the acquisition, it collaborated with Westminster City Council and local stakeholders to secure planning permission for the development.