Henderson Park buys Waldorf Astoria Edinburgh for £85m

Henderson Park and its inhouse hospitality operator and asset manager Klarent Hospitality have acquired five-star 241-room Waldorf Astoria Edinburgh - The Caledonian in a deal understood to be worth around £85 million.

Completed in 1903, the hotel - located on Princes Street in a category A listed building - will undergo room renovations as well as upgrades and restorations to its public areas and facilities.

This is the third Edinburgh hotel in Henderson Park’s Klarent Hilton portfolio, having purchased the Carlton on North Bridge at the other end of Princes Street as well as the Doubletree Edinburgh Airport as part of a 2,424 room/12 hotel portfolio acquisition in November 2021.

The property was previously owned by Twenty14 Holdings, the hospitality investment arm of Lulu Group International, which bought the property for the same price in 2018

Twenty14 Holdings refinanced the the property in 2021 with a senior and mezzanine debt package from Topland and Oaknorth worth £62 million.

JLL advised the seller on the transaction.

Why it matters

This latest acquisition, being the third Henderson Park purchase in Edinburgh in the past two years, underlines the real estate investment fund managers confidence in the city’s hotel market. According to Klarent, revenue per room for its Edinburgh Carlton hotel surpassed 2019 levels driven by a quicker than expected recovery in overseas tourism and business travel, and supported by continued strong domestic leisure demand.

Leonardo Royal Hotel Edinburgh, rebranded from Jury’s Inn Edinburgh, recently completed a £22.2 million refurbishment project and now has plans to to add 100 new bedrooms to its current 186 bedrooms by summer 2024.

Colliers’ hotel market index put Edinburgh at the top of the list when naming the top spot for hotel development in the UK after analysing the performance of 38 UK cities across ten performance indicators including occupancy figures, average daily room rates, revenue per available room (revpar) growth, development costs, land prices and market appetite.

What they said

Nick Weber, CEO and founder of Henderson Park said: “This transaction presents us with a rare opportunity to acquire an iconic hotel with an incredible 120 year heritage that is part of the very fabric of Edinburgh society.  As custodians of this landmark property, we have a number of planned investments that will improve the guest and visitor experience and ensure the Caley retains its status as one of Edinburgh’s most emblematic hotels going forward.”

John Brennan, chair of Klarent Hospitality added: “In the wake of Covid 19 Edinburgh has proven to be one of the most resilient real estate and hospitality markets in the U.K.  Our plans for The Caledonian will ensure that it remains well placed to capture continued strong demand.”

Will Duffey, Head of EMEA Hotels & Hospitality Capital Markets at JLL said: “Despite the macroeconomic challenges across Europe, the hotel industry has demonstrated drive and resilience. The sale of the iconic Caledonian Hotel in Edinburgh is representative of a sustained, strong investor appetite to secure quality product in prime locations.”

Kerr Young, Head of UK National Hotels Transactions, Capital Markets at JLL added: “We are pleased to have acted as advisors on the sale of The Caledonian Hotel. Edinburgh remains one of the most sought after hotel markets in Europe and we anticipate increased transactional activity in the UK during the second half of 2023.”