An Indian company run by a billionaire industrialist has taken ownership of one of London’s landmark hotels after Royal Bank of Scotland, the UK taxpayer-backed bank, sold Grosvenor House for £470m.
Sahara India Pariwar, the Indian conglomerate run by Subrata Roy, won the bid for the Park Lane hotel on Thursday after months of negotiations with the bank.
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RBS took control of Grosvenor House in 2003 when Le Meridien, the hotel operator, fell into administration. The hotel was shifted into RBS’s non-core division and earmarked for sale as part of the bank’s efforts to shrink its balance sheet.
RBS owned a long lease on the five-star, 494-room Mayfair hotel, which will continue to be operated by Marriott International.
Sahara India Pariwar, which paid cash for the hotel, fought off competition from at least two other shortlisted bidders, thought to include sovereign and state wealth funds from Singapore, Qatar and China. The Candy brothers, the upmarket developers, were initially interested in the sale but were not involved in the final stages.
The Sahara conglomerate, which specialises in media and sport investment, had been the favourite to secure the deal.
Mr Roy is considered one of India’s most flamboyant businessmen, with strong political ties and contacts in the Mumbai film industry.
In recent months his company has held talks about rescuing Metro-Goldwyn-Mayer, the debt-ridden Hollywood studio, and had also expressed an interest in acquiring Liverpool Football Club.
Back on its home ground, Sahara sponsors India’s national cricket and hockey teams and spent a record $370m to buy an Indian Premier League cricket team.
The Grosvenor House Hotel opened in 1929 on the site of the former London residence of the Dukes of Westminster. It was refurbished by Marriott International and relaunched under the JW Marriott brand in 2008. It is the venue for many of the capital’s black-tie events.
The sale to Sahara is the latest in a string of hotel disposals by RBS after a lending spree in the boom years left it with a large portfolio of real estate. The bank has sold six hotels this year, including the Cumberland hotel in London, which was bought by Starwood Capital, the private equity firm, and four Hilton-operated hotels.
Scaling back its commercial real estate exposure is a key part of the run-off of non-core assets, which fell from £258bn at the start of 2009 to £154bn by the third quarter of 2010.
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