American private investment firm, Starwood Capital Group, has sold an award winning East London hotel for the asking price of £150m — equivalent to around £580,000 per room.
The Connecticut-based developer acquired the Shoreditch High Street hotel building — on the site of the original Shoreditch Empire music hall — in 2012. It then invested in a multi-million refurbishment before rebranding it as the Ace Hotel London.
Honoured as the “Best Renovation” at the 2014 European Hotel Design Awards, the Ace Hotel Group will continue to manage the property, just north of the City of London’s financial district, on behalf of its new un-named owner. As well as its 258 bedrooms, the Shoreditch hotel offers 10 meeting spaces, a lobby bar, a nightclub and the popular Hoi Polloi restaurant.
In its brochure the 1999-established hotel operator boasts that “it re-envisions the traditional hotel model, enhancing the value of properties through an innovative and locally-inspired approach to design and development”.
It’s a philosophy supported by the East End of London increasingly establishing itself as an international trendsetter, with residential value growth outpacing almost all of London, and an office pipeline of 15-million square feet; approximately the same size as Canary Wharf.
“We elected to adopt an innovative approach to marketing the hotel to compliment the property and the submarket within which it sits,” explained Christopher Exler, an associate in Jones Lang LaSalle’s (JLL) hotels and hospitality group. “This was well received by the market and created a level of excitement which was befitting of the opportunity.”
Commenting on the sale Adam Wilson, the JLL group’s vice president, claimed the transaction “sets a new benchmark for hotel pricing in the local area” and represents a narrowing of the gap between East and West London pricing.
“This sales process attracted over £1bn of equity from all over the globe and is indicative of the insatiable appetite for London hotel real estate,” he added.
Better known as The London Music Hall, the original Shoreditch Empire opened on the Ace Hotel site in 1856 and was completely rebuilt 40 years later. Charlie Chaplin is claimed to have performed there in the early days of his career before he crossed the Atlantic to achieve fame in America. The music hall was finally demolished in 1935.
