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Track Record

DoubleTree by Hilton Docklands

Docklands Riverside, London

Acquired under-invested for £45m; repositioned and exited within 28 months at £200k per key.

Realised

DoubleTree by Hilton Docklands, Docklands Riverside, London

Key figures

£45m
Acquired
£11m
Total CapEx
378
Keys
£75.6m
Exit
29%
IRR
2.0x
Equity multiple
The Opportunity

Why we acted

  • Substantial property (23,640m2) opposite Canary Wharf, including 378 bedrooms and 13 meeting/conference rooms.
  • Hotel operated by Hilton but on a stub end lease, resulting in underinvestment.
  • Corporate customer base was still recovering from the GFC.
  • Poor invested product, tired and dated, which would not appeal to higher-rated Investment Banking customers.
  • Market timing/cycle, allowing higher yield to be secured.
Investment Strategy

What we did

  • Transformative and comprehensive refurbishment of entire hotel completed in August 2015 (whilst still operating).
  • River frontage (a clear USP) was optimised by creating a year-round outside bar and dining area.
  • Rebranded as a DoubleTree by Hilton.
  • Management Agreement with Hilton Worldwide for an initial contract term of 15 years (with an owner’s option to convert to a franchise agreement).
  • Lowest rated leisure volumes were replaced with equivalent volume of corporate business, pushing average rate up 30% (but still allowing for a discount versus more centrally located hotels).
  • Replaced senior management team to reflect new product positioning.
  • Procurement teams focussed on delivering reduced costs through our active asset management and cost reduction programmes.
  • Strategic sale of non-core property as residential (change of use) within 12 months to repatriate capital.
  • Refinanced within two years, following repositioning of the asset.
  • Hold period 29 months.
Hold

Start to finish

  1. April 2014AcquireUnder-invested, with strong repositioning potential
  2. 2014–15Invest & reposition£11m invested in rooms, public spaces and riverside activation
  3. 2015–16OptimiseOperational improvements, stronger trading, additional development potential uncovered
  4. August 2016ExitValue per key grown from £119k to £200k
Alongside

Related workstreams

Related

  • HOME
  • ABOUT WHAT
  • HOW
  • WHY
  • SERVICES ADVISORY & CONSULTANCY
  • DEVELOPMENT
  • ASSET MANAGMENT
  • OPERATIONAL MANAGEMENT
  • PROPERTY MANAGEMENT
  • TRANSACTIONS TRANSACTION SELECTION
  • TRACK RECORD
  • TESTIMONIALS
  • NEWS
  • ESG
  • CONTACT
  • A terrace of former townhouses located on Rotherhithe Street, London SE16.
  • Used by the Hotel as part of its operations, comprising a Living Well gym, treatment room, hairdressers, and staff accommodation.
  • Existing area of 11,889 sq/ft.
  • Development of a comprehensive set of residential plans to maximise potential build-area of the site for onward sale (the development GIA was brought to 12,418 sq/ft).
  • Secured planning consent to convert the terrace back to seven townhouses.
  • Sale of the block to a developer.
Contact

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Whether you hold an underperforming asset, are weighing an acquisition, or need an owner-side view on strategy and capital, we would be glad to talk it through.

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