PPHE Hotel buys development site in City of London for GBP17.5 million

(Alliance News) - PPHE Hotel Group Ltd on Monday said it has agreed to buy a 13,000 square metre mixed-used development site near the City of London for GBP17.5 million.

The Amsterdam-based international hospitality real estate company said the site, which has planning permission, is earmarked for the first PPHE Select Service hotel in London.

The hotel, which is due to open in 2029, will feature a select service Radisson Red lifestyle hotel, with at least 182 bedrooms, a restaurant, bar and gym and 41,000 square foot of office space.

PPHE Hotel said it expects an all-in investment cost of around GBP90 million for the project, including the site acquisition price of GBP17.5 million.

The company said it expects the site to run at a high single digit unlevered annual yield at stabilisation.

The site will be purchased via the subsidiary European Hospital Real Estate Fund. The fund will pay for the initial acquisition, with the wider company securing construction finance for the development.

PPHE Hotel said it expects the acquisition to complete in the "coming months".

"This site will be a great addition to our development pipeline as we continue to extend our portfolio and presence in the London market," said Co-Chief Executive Officer Greg Hegarty.

"It is an exciting project which leverages our 'buy, build, operate' business model and expertise as well as our multi-brand and multi-market segment strategy."

Shares in PPHE Hotel were flat at 1,566.30 pence in London on Monday morning.

By Michael Hennessey, Alliance News reporter

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