Over the past few years Hyatt has been raising billions of pounds from selling many of the real estate assets in its portfolio, but one that is remaining part of it for now is the Andaz Liverpool Street in London.
The reason for cancelling the proposed sale will be familiar to many that have run processes in dense, city centre locations, where buildings nestle uneasily alongside each other.
In this case it was down to complications around the UK rail network and this led to Hyatt terminating the purchase of sale agreement during the quarter.
Hyatt was working with a number of parties on the wider redevelopment of Liverpool Street station, which, Hyatt CEO Mark Hoplamazian, said: had "a number of conditions associated with it, including approvals from network rail that didn't, were not issued."
“We don't believe the opportunity is dead. We believe that the deal that we had signed up doesn't have the authorities that it needs to move forward. I don't believe that that means that there won't be a redevelopment, I believe it will take a different shape. And you can imagine, we remain in very close contact with all the parties involved. And I'm actually optimistic. It's a great location and a great hotel market. adjacent to some of the biggest businesses in the city of London,” Hoplamazian said.
Key for Hyatt is that Network Rail sorts out the sequencing of the whole project.
“In the meantime, the hotel is performing very well. So … we're getting paid to wait, so to speak. So that's really the whole story there. And I would describe it as a setback, not a not something that we are turning off because we won't be able to sell it,” Hoplamazian said.
One thing Hyatt wanted to make clear to analysts is that it will not put money into the redevelopment. “We will only participate by way of selling the property into a redevelopment plan,” Hoplamazian said.
The Andaz Liverpool Street wasn’t the only sale that Hyatt pulled the plug on. “[We] are no longer under contract for two other properties that were previously signed,” said Hoplamazian.
He added: “The other hotels actually were relatively small deals. We mentioned a few calls ago that we have a few hotels that are -- we would put in the category of portfolio cleanup. They happen to be unleased property. So it's a ground lease that the hotels operate on.”