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Whitbread, the UK’s leading hospitality group, has acquired the freehold interest in New London House at 6 London Street, EC3 in London.
The 89,722 sq ft NIA office, retail and restaurant building was acquired from clients of Orchard Street Investment Management for £56.5m.
The building, which was developed in the 1970s and comprises a podium and tower structure, is located adjacent to Fenchurch Street station in the heart of London’s financial district.
Whitbread intends to seek planning consent from the City of London Corporation to repurpose and extend the current building into a hotel-led, mixed-use development with a mix of complementary uses on Crutched Friars and London Street together with new public spaces.
Jonathan Langdon, senior acquisition manager at Whitbread, said: “The City of London’s appeal as a business and leisure destination continues to underwrite our investments in new hotel developments in the Square Mile.
“New London House presents an excellent opportunity to expand our network in the City and deliver our high-quality, great value hotel bedrooms in a location with the transport connections and proximity to business and leisure demand drivers that our customers expect.”
Whitbread has more than 25 years’ experience converting former office buildings into successful Premier Inn and hub by Premier Inn hotels with two such developments in the City of London currently under construction at Farringdon and Moorgate. The intention at New London House is to retain as much of the existing structure as possible.
The New London House acquisition is part of Whitbread’s strategy of targeting office buildings which no longer meet the requirements of occupiers and investors and offer the opportunity to repurpose into hotels.
Mark Anderson, managing director for property and international at Whitbread, said:
“We are seeing a structural shift in the London office market presenting opportunities to acquire office buildings that are no longer fit for occupier and investor purposes and to reposition and refurbish them into successful hotels. Our strong balance sheet, plentiful liquidity, and ability to buy and develop freehold property, which is rare in our sector, leaves Whitbread very well-placed to take advantage of this structural shift.
“We are looking forward to working collaboratively with the City of London to repurpose New London House and create a landmark new hotel-led development in a superb location adjoining Fenchurch Street station.”
Richard Walters, partner at Orchard Street, said: “New London House has proven to be a successful long-term investment for Orchard Street. Having completed our business plan of maintaining income for our client whilst preparing the asset for repositioning, we are delighted to pass the baton to Whitbread for the next phase of the property’s economic life.”
