Marylebone Warwick Balfour - Retail - London W1, Park Lane
Date: 07 Mar 2000
Marylebone Warwick Balfour Group Plc ("MWB") today announces that it has agreed terms to purchase the majority interest in a proposed £110m five-star hotel, residential, and retail development on a prominent site on London's Park Lane, close to Marble Arch.
MWB is to acquire a further 61% equity interest in the development at 140 Park Lane from its joint venture partner, the Sincere Company Limited of Hong Kong, for £14.2m cash, equivalent to 61% of the net asset value of 140 Park Lane Limited. As a result of the proposed purchase, MWB's equity and profit sharing interest in the 146,000 sq ft development, independently valued at £54m, will increase to 70%.
The purchase is being financed from MWB's highly successful £30m Placing and Open Offer last December and a new five-year Senior Debt Facility from Barclays Bank.
Last October, MWB announced that planning consent had been granted for the redevelopment of this mainly freehold site to provide a 157-room five-star hotel, 20 penthouse apartments and a range of ground floor retail/restaurant units.
MWB is also at an advanced stage of negotiations with the US-based Marriott International for them to enter into a 20-year hotel operating and management contract, including an income guarantee for the first 10 years of the agreement. The Park Lane hotel is intended to be Marriott's UK flagship.
Joe Shashou, MWB Director responsible for hotels, said: "This is a prime opportunity to acquire a majority interest in the last substantial freehold development site on Park Lane capable of producing a major international five-star hotel.
"Our involvement in the scheme goes back almost three years when we originally acquired the site with Sincere. Having assembled this complicated site, we secured planning consent on appeal and now look forward to creating a highly successful hotel for the Group, to be operated by Marriott International."
This is MWB's fourth major hotel scheme. It is undertaking a £50m turnkey development for the French hotel group Accor on a prominent Pall Mall site; a £65m luxury hotel, office and leisure development in the heart of Glasgow, and it is at detailed design stage for a major hotel project at West India Quay, opposite Canary Wharf.
The proposed purchase of the interest is subject to shareholders' approval and a circular will be sent to shareholders shortly.
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