kensington close hotel

KENSINGTON CLOSE
HOTEL
Kensington, London W8
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INVESTMENT
HIGHLIGHTS
PRIME LONDON LOCATION
Kensington Close Hotel occupies a superb location in the heart of London’s
affluent suburb of Kensington in the Royal Borough of Kensington and
Chelsea. The Hotel benefits from a strategic location within easy walking
distance of many of London’s major tourist attractions, luxury shopping
districts and transport links. As the birthplace of the boutique and lifestyle
hotel in the 60’s, the Royal Borough of Kensington and Chelsea is now
home to the world’s most expensive hotels and homes.
RARE CENTRAL LONDON FREEHOLD
The 310,229 sqft (28,821 sqm) property is held on a freehold title and
occupies a site of 1.59 acres (6,475 sqm) in prime central London.
Surrounded by some of the world’s most expensive residential property,
Kensington Close Hotel is one of the top ten largest hotels in London
comprising 708 en-suite bedrooms along with extensive public areas
including restaurant, cafe, bar, 7,240 sqft (673 sqm) of conference &
banqueting space and a health club.
REPOSITIONING & REBRANDING POTENTIAL
Since the property was converted to a hotel in 1960, the Kensington
Close Hotel has been independently owned and operated and has an
established and highly regarded trading profile in the London market
allowing it to achieve consistently high occupancy levels. Now, in
recognition of the changing landscape of luxury lifestyle hotels, and the
ever-increasing reputation of Kensington, the property is being offered for
sale unencumbered by brand and management. This creates an outstanding
opportunity for real estate developers and hotel investors to explore the full
potential and flexibility this property offers.
WORLD’S MOST DESIRABLE HOTEL INVESTMENT MARKET
London remains one of the strongest hotel operating markets in Europe
and is one of the most keenly sought-after real estate investment markets
in the world. Underpinned by strong property fundamentals, London also
benefits from exceptional corporate and leisure demand drivers ensuring
long-term demand growth whilst Kensington and the surrounding area is
characterised by a notable shortage of sites providing high barriers to entry
and little scope for increased competition in the medium term.
POTENTIAL DEVELOPMENT OPPORTUNITIES
Kensington Close Hotel is located within a thriving commercial and
residential location within prime central London, and the age and style of
the building suggests the site may offer unique potential as a substantial
mixed-use redevelopment opportunity featuring new build hotel, residential
and commercial elements.
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Kensington Palace
BAYSWATER
HYDE PARK
ROYAL GARDEN
HOTEL
PARK LANE
MAYFAIR
ROYAL ALBERT
HALL
CITY
KNIGHTSBRIDGE
IMPERIAL
COLLEGE
HARRODS
SHARD
KENSINGTON
HIGH STREET
BUCKINGHAM
PALACE
BULGARI
HOTEL
CANARY
WHARF
VICTORIA &
ALBERT MUSEUM
NATURAL HISTORY
MUSEUM
CROMWELL
ROAD
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LONDON
Located within a tranquil oasis a short walk from Kensington High Street, and surrounded by some of London’s most expensive residential properties,
Kensington Close Hotel occupies an enviable position at the heart of the Royal Borough of Kensington and Chelsea.
Finance
A safe haven for foreign investment and the finance capital of Europe,
75% of the Fortune Global 500 companies have a presence in London
and one third of these companies choose London for their European
Headquarters. As such, London is universally regarded as the world’s
leading international financial and business centres and a key driver of the
UK economy.
CULTURE
London’s greatest cultural institutions are on the doorstep of Kensington
Close Hotel with the Natural History Museum, the Victoria & Albert
Museum, Kensington Palace, and The Royal Albert Hall all located within
a short walk of the Hotel. London is the top European destination for
international tourists ranked by visitor numbers. Olympia Exhibition
Centre, Imperial College and The Royal Marsden hospital are also on its
doorstep; all of which are key demand generators for the Hotel.
Lifestyle
Kensington is also renowned for its high end shopping, with Harrods and
other luxury boutiques in the Knightsbridge and Chelsea area also within
walking distance of the Hotel. Additionally, a plethora of restaurants and
cafes are located along Kensington High Street, situated in close proximity
to the Hotel.
Hyde Park and Kensington Gardens, two of London’s eight Royal Parks,
are only moments away and are home to a number of famous
landmarks including the Serpentine Lake spanned by the wonderful
Serpentine Bridge, the Diana Memorial Fountain and the famous
Wellington Monument.
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LONDON HOTEL
OPERATING MARKET
KENSINGTON HOTEL
SUB-MARKET
As the most desirable hotel market in the world, London benefits from an incredibly
diverse array of demand drivers and global source markets, which make for a robust
and unwavering market performance.
The Kensington hotel sub-market benefits from all of the fundamentals that make
London one of the top revenue performing hotel markets in Europe. Rich in history,
culture, arts and retail, Kensington unequivocally appeals to the leisure segment and
achieves impressive annual occupancy. Furthermore, the neighbourhood boasts
the most highly qualified population in the UK and has thus built a reputation in the
professional service sector, driving corporate demand.
The city benefits from its geographical location between the Americas and Asia,
and thus has subsequently paved the way for unrivalled financial and logistical
accessibility. Today, 40% of foreign equities, more than anywhere else in the world,
are traded in London whilst 89% of global cities are connected by non-stop flights
at least three times a week from one of London’s six international airports.
These abundant demand drivers, and constricted supply of new hotel stock, have
resulted in robust trading dynamics with key performance indicators over the
past four years consistently outperforming other international markets.
London has historically proven exceptionally resilient at absorbing new stock,
as illustrated below.
Full-Service Royal Borough of Kensington and
Chelsea (RBKC), Westminster and Wider London
Hotel Market v Kensington Close Hotel Occupancy
24 months to February 2015
London HOTEL Occupancy versus Total Rooms
Sold (Indexed) 2010 – 2014
Feb 15
Jan 15
Dec 14
Nov 14
Oct 14
Sep 14
Aug 14
Jul 14
Jun 14
May 14
Apr 14
Mar 14
Feb 14
Jan 14
2014
Dec 13
2013
Nov 13
2012
60%
Oct 13
2011
65%
Sep 13
2010
70%
Aug 13
65%
75%
Jul 13
70%
80%
Jun 13
75%
85%
May 13
80%
Westminster
90%
Apr 13
85%
Rooms Sold
London
Mar 13
Occupancy
90%
Occupancy
Room Occupancy
95%
255
250
245
240
235
230
225
220
215
210
205
200
RBKC
95%
Rooms sold x 10,000
100%
60%
KCH
100%
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CoMPETING KENSINGTON HOTELS
Queensway
Marker Hotel Name
A 3 22 0
A402
gton
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Stre
rch
Chu
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W Cro
in
Kens
ue
ark Aven
lland P
Ho
Notting Hill Gate
Holland Park
e
Shepherd’s Bush
Kensington Gardens
Hyde Park
Holland Park
17
0
22
A3
A315
Ke
2
22
0
Kensington Olympia
s
Earl
urt
Co
A3
22
0
ad
Ro
9
11
22
A3
0
Hammersmith
7
Barons Court
A4
ad
West Cromwell Ro
West Kensington
Fi
nb
or
ou
Earl’s Court
gh
Ro
ad
4
6
5
A4
16
14
12 A4
708
Cola Holdings
2
Hilton London Olympia
405
Hilton Worldwide
3
Copthorne Tara Hotel London
Kensington
833
Millennium & Copthorne
4
Park International
172
Hospitality Lodging South
5
Holiday Inn London Kensington
Forum
906
Redefine BDL Hotels
6
Hotel Indigo London Kensington Earls Court
100
Cairn Group
7
K&K Hotel George
154
Highgate Hotels
8
Millennium Bailey's Hotel London
Kensington
212
Millennium & Copthorne
9
London Marriott Hotel Kensington
216
Marriott
10
Millennium Gloucester Hotel
London Kensington
610
Millennium & Copthorne
11
Ambassadors
150
Center London Hotels
12
NH Kensington
121
NH Hoteles
13
Best Western Burns
104
Lowy Hotel Solutions
14
Crowne Plaza London Kensington
162
InterContinental Hotels
Group
15
Harrington Hall
200
Independent
16
Radisson Blu Edwardian Vanderbilt
215
Edwardian Group
17
Royal Garden
394
Goodwood Group
e
2
at
Queen’s G
A3
20
32
15
A3
3
Operator
Kensington Close Hotel & Spa
Knightsbridge
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Str High Street Kensington
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Gloucester Road
A
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Knigh tsbridge
Kensing ton Road
Rooms
Gloucester Road
8
South Kensington
10
15
13
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B
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Not to scale. For indicative purposes only.
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Connectivity
The Hotel benefits from good transport links with High Street Kensington
underground station (District and Circle lines) 0.2 miles north, Gloucester Road
underground station (Piccadilly, District and Circle lines) 0.7 miles south east and
Notting Hill Gate underground station (Central, District and Circle lines) 0.9 miles
north providing access to the West End and the City. Additionally, a variety of bus
routes operate along Kensington High Street connecting to all areas of London.
Paddington Station (1.6 miles north east) provides national rail connections,
including the Heathrow Express. Cromwell Road (A4), one of London’s main
arterial routes, is 0.4 miles south of the site providing direct access to the M4 and
on to the M25 and national road connections.
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PROPERTY OVERVIEW
Kensington Close Hotel was built in 1939 as a ‘residential club’, accommodating
apartments, a restaurant, recreation rooms and garages. The property was
developed by Charles Peczenik, an engineer and property developer who was
involved with the rebuilding of much of Grosvenor Square.
The Hotel underwent a change of use and extension in 1960 to provide a 550
bedroom hotel. A further extension was completed in 2012 resulting in the room
count increasing to 708.
The Property comprises a full service 4-star hotel with a cafe, bar/lounge,
restaurant, conference & banqueting facilities and a health club arranged over
lower ground, mezzanine, ground and six upper floors.
FLOOR
ACCOMMODATION
Lower Ground
Health club
Car parking
Staff accommodation
Plant
Mezzanine
Health club changing rooms
Ground
Cafe
Reception
Bar/Lounge
Conference & banqueting rooms
Restaurant
Kitchen
Garden
Back of House
Plant
First to Sixth
Guest bedrooms
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Guest rooms
Kensington Close Hotel provides 708 well appointed and proportioned guestrooms.
The guestrooms are all en-suite and provide a good mix of modern amenities such
as flat-screen TV’s , individually controlled air conditioning and Wi-Fi.
A breakdown of the room types can be found below.
We provide below a breakdown of the conference and meeting rooms with
maximum capacities and approximate areas.
ROOM
MAX CAPACITY
SIZE SQM
Buckingham 1
40
45.6
Buckingham 2
40
39.8
78
Buckingham 1 & 2
100
85.8
Double Standard
195
Windsor 1
60
51.4
Twin Standard
108
ROOM TYPE
NUMBER
Single Standard
Windsor 2
40
43.1
120
94.5
Double Superior
31
Windsor 1 & 2
Twin Superior
30
St James 1
14
14.7
Double Executive
215
St James 2
14
19.6
Executive Club
49
St James 1 & 2
30
35.8
2
Balmoral 1
100
79.5
708
Balmoral 2
150
113.8
Suites
Total
Food and Beverage Facilities
Caffe Musetti
The Hotel benefits from its own in-house cafe, Caffe Musetti. The cafe is situated
in the main hotel lobby opposite the reception desks and provides informal seating
in the conservatory.
Lounge Bar
The lounge bar is situated between the Hotel lobby and conferencing suites and
serves drinks, afternoon tea and snacks in a relaxed and air conditioned seating area.
Boulevard Restaurant
As the main hotel restaurant, the Boulevard Restaurant is used for breakfast lunch
and dinner. The restaurant provides c.300 covers and also benefits from direct
access to the garden which, during the summer period, offers al fresco dining.
Conferencing & Banqueting Facilities
The Hotel benefits from extensive conference & banqueting facilities. All function
rooms are located on the ground floor and are accessed through the main Hotel
lobby, with each having access to a breakout area. All conference & banqueting
rooms feature air-conditioning and audiovisual facilities.
Balmoral 1 & 2
250
198.1
Balmoral 3
200
170.0
Boardroom 1
12
29.4
Boardroom 2
12
29.4
Boardroom 3
TOTAL
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29.4
736
672.4
Leisure facilities
The Hotel features a health club which operates under a management contract with
Mosaic Spa and Health Clubs. The health club features a gym (with cardiovascular
equipment, multi-gyms and free weights), swimming pool, sauna, steam room, hot
tub, fitness studios and treatment rooms.
Capital Expenditure Summary
The Hotel underwent a significant refurbishment between 2010 and 2012, with
approximately a £35 million being invested by Cola Holdings. The comprehensive
refurbishment included updating the M&E infrastructure, renovating the health
club along with approximately 500 of the existing bedrooms plus developing an
additional 160 new guestrooms.
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Floor plans
Not to scale. For indicative purposes only.
Not to scale. For indicative purposes only.
Ground Floor
Not to scale. For indicative purposes only.
FIRST Floor
FOURTH Floor
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DEVELOPMENT
POTENTIAL
Kensington Close Hotel sits on a significant 1.59 acre site in Kensington,
within prime central London. Given the location, size and age of the building, it
undoubtedly provides a substantial potential redevelopment opportunity.
The property is situated within the jurisdiction of the Royal Borough of Kensington
and Chelsea. We understand demolition of the existing building would not be
opposed, therefore offering an incredibly rare chance to create a major mixeduse new build scheme including hotel, leisure, retail and residential uses subject to
obtaining the necessary consents
Kensington is an established and affluent area, long known for traditional and
exclusive homes, a fashionable and independent retail offering, convenient access to
the West End and City as well as having pleasant garden squares and two of central
London’s best known parks; Kensington Gardens / Hyde Park and Holland Park.
It is for these reasons that Kensington has recently been the location of a number
of new build luxury residential developments; One Kensington Gardens by Lancer
Property Asset Management, Vicarage Gate by Northacre, Holland Green by
Chelsfield and Campden Hill by Native Land and Grosvenor. These schemes have
raised the benchmark for luxury living in Kensington and redefined the area as a
positive lifestyle choice.
While Kensington is home to many affluent residents, it also caters to highend fashion boutiques, global brands and independent retailers. This attracts
consumers from across London as well as satisfying tourism trade which circulates
from attractions such as the Royal Albert Hall and Kensington Palace. Footfall is
currently thought to be in the region of 15 million and current occupancy levels are
high reflecting the high demand for space in Kensington.
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TENURE
METHOD OF SALE
Kensington
The freehold site is comprised of four
parcels of land Close
registeredHotel,
with the
Land Registry under title numbers BGL5315, BGL5316, BGL5317 and
BGL4736.
London
The Hotel is being marketed for sale on a private treaty basis, free of any brand or
management encumbrances and subject to contract only.
The Hotel is for sale through a transfer of 100% of the issued share capital of
the proprietary company, Kensington Close Hotel Limited, which is a single asset
Special Purpose Vehicle and which owns a 100% interest in the site.
EPC
12
m
10.3
Kensington Close Hotel has an EPC rating of B
FURTHER INFORMATION
Regent
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William Cobbett House
Following receipt of a signed confidentiality agreement, access to a full information
pack in relation to the opportunity is available on the project website
www.KensingtonClose.co.uk and includes:
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NOTE:- Reproduced from the Ordnance Survey Map with the permission of
the Controller of H.M. Stationery Office. © Crown copyright licence number
100024244 Savills (UK) Ltd. NOTE:- Published for the purposes of identification
only and although believed to be correct accuracy is not guaranteed.
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Investment analysis
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Floor plans
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Hotel operational information
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Energy Performance Certificate
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VIEWING
All viewings are strictly by appointment only. Please contact the selling agents
below to arrange a viewing.
CONTACT
George Nicholas
Global Head of Hotels
[email protected]
+ 44 (0) 20 7499 8644
Robert Stapleton
Director
[email protected]
+ 44 (0) 20 7409 8029
Raymond Clement
Managing Director - Asia
[email protected]
+65 6415 7570
Robert Seabrook
Executive Director
[email protected]
+44 (0) 20 7182 3867
Sean Pacey
Associate Director
[email protected]
+44 (0) 20 7182 2471
Jileen Loo
Director
[email protected]
+44 (0) 20 7182 3933
Julien Naouri
Associate Director
[email protected]
+ 65 6415 7583
CEA Reg. No.: R003905I
Residential Development
Tim Whitmey
Director
[email protected]
+ 44 (0) 20 7409 9999
Lizzie Parrott
Associate
[email protected]
+ 44 (0) 20 7409 9943
Important Notice
Savills, CBRE and their clients give notice that:
They are not authorised to make or give any representations or warranties in relation to the property either here or elsewhere, either on their own
behalf or on behalf of their client or otherwise. They assume no responsibility for any statement that may be made in these particulars. These
particulars do not form part of any offer or contract and must not be relied upon as statements or representations of fact.
Any areas, measurements or distances are approximate. The text, photographs and plans are for guidance only and are not necessarily
comprehensive. It should not be assumed that the property has all necessary planning, building regulation or other consents and Savills have not
tested any services, equipment or facilities. Purchasers must satisfy themselves by inspection or otherwise.
Designed and Produced by Savills Marketing: 020 7499 8644 | October 2015
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