Shiva Hotels is in talks to buy the Kingsway Hall Hotel on Great Queen Street, W1, from London hotelier Bakir Cola.
The 170-bedroom hotel (pictured) was brought to market through Savills in June for £100m, reflecting a 5.5% yield.
The deal would take Shiva’s London portfolio of built and planned bedrooms to more than 1,000. Shiva’s pipeline includes Morley House on Holborn Viaduct, EC1, which it bought for £40m last month.
Last year it also bought the 300,000 sq ft Millennium Bridge House, EC4, which has consent to be redeveloped into a 348-bedroom hotel.
The sale comes after Cola Holdings’ pretax profit fell by 30% to £9.1m in its last published accounts for the year to 30 September 2013.
The strength of demand for London hotel opportunities was further underlined this week by the sale of Bavaria House at 13-14 Appold Street, EC2, to New York-based Masterworks Development Corporation.
The City fringe office block is being sold by German Bank Bayern LB. It was expected to attract strong interest from residential developers, given the potential to build at height on the site. But Masterworks emerged as the highest bidder after agreeing to pay close to £50m for the building, well over the £37m price tag.
Hotel performance in London and the regions has continued to improve in the second quarter, with average revenue per available room increasing by 10% year-on-year, according to The Hotel Bulletin, compiled by HVS, Zolfo Cooper and AM:PM.
All the cities reviewed recorded RevPAR growth in Q3. London saw a hike of 4% year-on-year.
Savills is advising Cola; Knight Frank is acting for Bayern.
annabel.dixon@estatesgazette.com
