Singapore’s Fragrance Group has purchased a Holiday Inn hotel in west London from British real estate fund manager Queensgate Investments for an undisclosed sum, as the privately held builder continues to expand its hotel portfolio.
The property developer controlled by tycoon Koh Wee Meng picked up the 906-room Holiday Inn London Kensington Forum hotel at 97 Cromwell Road near Kensington Garden in December to mark one of the biggest hotel deals in the city last year, according to a Savills report.
The acquisition was one of a pair of UK hospitality purchases by Fragrance Group in December with the one-time “love hotel” specialist contributing to the country’s £1.42 billion ($1.93 billion) in hotel transactions in the fourth quarter. That surge helped bring UK hotel investments back to a near-normal £4.22 billion last year as volumes rebounded to figures just shy of the market’s 15-year average, according to Savills.
For Fragrance, which Koh privatised in a $685.6 million deal in the third quarter, the acquisition provides a trophy London asset for the group’s expanding UK portfolio, after the hotel’s former owner, Jason Kow’s Queensgate Investments, failed to win approval for a £1 billion redevelopment proposal in the face of public opposition.
Redevelopment Plan Rejected
Completed in 1972, the Holiday Inn London Kensington Forum spans 500,000 square feet (46,451 square metres) of built area along a major road in central London’s Royal Borough of Kensington and Chelsea.
Queensgate, which acquired the property from Apollo Global Management in 2019 for £350 million (now $479 million), had proposed to knock down the asset and transform it into an integrated development with 749 bedroom hotels, 340 serviced apartments, spaces for restaurants and 62 affordable homes to be build alongside the complex.
The proposal received backing from the mayor twice – first in 2019 and then again last year – but was widely frowned upon by the general public and was rejected by local planning authorities on several occasions before Queensgate withdrew the proposal in March 2021.
The developer shortly thereafter hired Savills and Eastdil to market the property, with Rob Stapleton, director of hotel capital markets at Savills, telling hospitality site The Hotel Property Team a new owner could achieve a fresh start in redeveloping the asset that sits on a two-acre (0.81 hectare) freehold land parcel.
Local multimedia platform The Caterer reported that the hotel is set to close down early this year to pave the way for refurbishment and would be reopened later in 2022.
Mingtiandi.com reached out to Fragrance Group and Queensgate for more details but was not able to get a response by the time of publication. Savills declined to comment on the deal.
Koh Boosts British Portfolio
The London acquisition adds to a Fragrance portfolio which as of 30 June included hotels, residential, commercial and industrial properties worth a combined S$3.21 billion ($2.38 billion) across Singapore, Australia and the UK, according to the company latest financial statement.
As listed on Fragrance’s website, the company’s UK properties include five operational hotels, such as the 180-bedroom Imperial Hotel and the 141-unit Lyndene Hotel in northwestern England’s Lancashire, as well as six hotel development projects.
Earlier in December, local news sites reported that Fragrance Group acquired The Aloft Liverpool Hotel for £12 million, adding to its hotels in the British port city, with that asset located just a few blocks away from the Municipal Buildings, an existing Fragrance property which the group plans to convert into a four-star hotel.
Fragrance continues to expand its portfolio months after Koh took it private through a buyout that valued the formerly SGX-listed firm at S$927 million.
Koh, who is now the 40th richest man in Singapore, first set his sights on the UK hospitality market in 2016 according to an interview with Forbes, with the entrepreneur who started out in the 1990s with hotels in Singapore’s red light district of Geylang, snapping up mid-tier hotel bargains across Great Britain to take advantage of the cheap pound at the time.