art'otel
24/06/2021 by Buildington

PPHE Hotel Group has agreed terms to enter into a joint venture with Clal Insurance, one of Israel’s leading insurance and long-term savings companies, in respect of Park Plaza London Riverbank and the art’otel London Hoxton development, two of the Group’s prime London assets.

PPHE will receive a cash consideration of £113.7 million as part of this transaction, enabling the Group to pursue new opportunities to speed up growth.

The deal values Riverbank and the all in development cost budget of art'otel at £542.3million.

Eli Papouchado, Chairman and Founder of PPHE Hotel Group, commented: “We are excited to enter into this joint venture with Clalon Park Plaza London Riverbank and art’otel London Hoxton, which are strategic assets in our award-winning portfolio. Clal’s investment reflects our mutual confidence in the strength of the London hospitality real estate market. The agreement values these two assets at the Group’s latest Net Asset Value and the proceeds will enable the Group to pursue new growth opportunities as the pandemic period subsides. The joint venture with Clal comes at a very exciting time as we look to rebuild our business, capitalising on the extensive investment programmes, which we completed just before the pandemic struck.”

Boris Ivesha, President & CEO of PPHE Hotel Group, added: “London is one of world’s most resilient hotel and real estate markets and it typically rebounds quickly after downturns, largely due to its wide appeal to tourists and business travellers alike. We are delighted to see signs of growth and recovery already in the UK market. Clal is set to join our journey of growth at an exciting time as our recovery has started with the hotels reopening on 17 May, opening their doors to domestic leisure guests with international travel expected to return when restrictions are eased or green corridors are introduced as recently was the case between Israel and the UK. We are very proud and excited for our largest Park Plaza London hotel, to be selected by the All England Lawn Tennis Club (‘AELTC’)to be the Official Player Hotel for The Championships 2021(‘Wimbledon’), in order to provide a minimised risk environment for all players and their support teams for this year's Championships. As the Official Player Hotel, we have worked closely with the AELTC to provide a full service hospitality offering including testing and recovery centres, gyms, hospitality desks for players and highly tailored nutritional food and beverage offerings.”

Upon completion of the transaction, Clal will be a minority partner and owner of 49% of the shares in one special purpose company (“JVCo”) holding indirectly the real estate and operations of both Riverbank and Hoxton. The Group remains the majority owner of the hotels by retaining a 51% holding in JVCo and, through its management company, has secured a 20-year hotel management agreement in respect of both hotels.

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