Impending sale could lead to rebranding for London's Ritz

London

THE billionaire Barclay brothers have kicked off the sale process for London's landmark Ritz hotel, giving the world's super wealthy a rare chance to reshape one of the British capital's most storied properties.

Broker Jones Lang LaSalle has been hired to work alongside Spartan Advisors, the investment and advisory firm founded by the brothers' long-term associate Richard Faber, according to people familiar with the sale process.

The hotel will be offered to a handful of global investors, together with a building next door on Arlington Street that could pave the way for an extension of about 50 rooms, the people said, asking not to be identified as the details are private.

Deals for London's super prime hotels are few and far between, with the Barclay brothers' 2015 disposal of their majority stake in the Maybourne Hotel Group, which owns the Berkeley, Claridge's and Connaught hotels, among the most recent comparable transactions.

Even then, two of those properties are held on long leases, while the buyer of the Ritz will also own the land on which the hotel's 136 rooms and suites sit.

Although no guide price has yet been set, according to the people familiar with the sale, the Times of London newspaper has reported that the deal could fetch as much as £800 million (S$1.4 billion).

That price reflects about a 70 per cent premium over the price per room at which the brothers sold their stake in Maybourne Hotel Group to Qatar's Constellation Hotels.

The deal will be offered to a shortlist of sovereign wealth funds and high net-worth investors, mostly from the Middle East, Hong Kong and Singapore, plus a handful of European and US families, the people said.

Any buyer will have the option to install their own brand, meaning luxury hotel groups could also bid, they said. The hotel's adjoining casino has the potential to be transformed for an alternative use, including as a private members' club, they said.

David and Frederick Barclay bought the property, which occupies a prime corner of London's St James's district overlooking Green Park and Piccadilly, for about £75 million in 1995. BLOOMBERG