Kensington, London W8

KENSINGTON CLOSE HOTEL Kensington, London W8

2 3 INVESTMENT HIGHLIGHTS PRIME LONDON LOCATION Kensington Close Hotel occupies a superb location in the heart of London s affluent suburb of Kensington in the Royal Borough of Kensington and Chelsea. The Hotel benefits from a strategic location within easy walking distance of many of London s major tourist attractions, luxury shopping districts and transport links. As the birthplace of the boutique and lifestyle hotel in the 60 s, the Royal Borough of Kensington and Chelsea is now home to the world s most expensive hotels and homes. RARE CENTRAL LONDON FREEHOLD The 310,229 sqft (28,821 sqm) property is held on a freehold title and occupies a site of 1.59 acres (6,475 sqm) in prime central London. Surrounded by some of the world s most expensive residential property, Kensington Close Hotel is one of the top ten largest hotels in London comprising 708 en-suite bedrooms along with extensive public areas including restaurant, cafe, bar, 7,240 sqft (673 sqm) of conference & banqueting space and a health club. REPOSITIONING & REBRANDING POTENTIAL Since the property was converted to a hotel in 1960, the Kensington Close Hotel has been independently owned and operated and has an established and highly regarded trading profile in the London market allowing it to achieve consistently high occupancy levels. Now, in recognition of the changing landscape of luxury lifestyle hotels, and the ever-increasing reputation of Kensington, the property is being offered for sale unencumbered by brand and management. This creates an outstanding opportunity for real estate developers and hotel investors to explore the full potential and flexibility this property offers. WORLD S MOST DESIRABLE HOTEL INVESTMENT MARKET London remains one of the strongest hotel operating markets in Europe and is one of the most keenly sought-after real estate investment markets in the world. Underpinned by strong property fundamentals, London also benefits from exceptional corporate and leisure demand drivers ensuring long-term demand growth whilst Kensington and the surrounding area is characterised by a notable shortage of sites providing high barriers to entry and little scope for increased competition in the medium term. POTENTIAL DEVELOPMENT OPPORTUNITIES Kensington Close Hotel is located within a thriving commercial and residential location within prime central London, and the age and style of the building suggests the site may offer unique potential as a substantial mixed-use redevelopment opportunity featuring new build hotel, residential and commercial elements.

4 5 ROYAL GARDEN ROYAL ALBERT Kensington Palace BAYSWATER HYDE PARK HOTEL PARK LANE MAYFAIR HALL CITY KNIGHTSBRIDGE IMPERIAL COLLEGE HARRODS CANARY WHARF VICTORIA & ALBERT MUSEUM NATURAL HISTORY MUSEUM CROMWELL ROAD SHARD KENSINGTON HIGH STREET BUCKINGHAM PALACE BULGARI HOTEL

6 7 LONDON Located within a tranquil oasis a short walk from Kensington High Street, and surrounded by some of London s most expensive residential properties, Kensington Close Hotel occupies an enviable position at the heart of the Royal Borough of Kensington and Chelsea. Finance A safe haven for foreign investment and the finance capital of Europe, 75% of the Fortune Global 500 companies have a presence in London and one third of these companies choose London for their European Headquarters. As such, London is universally regarded as the world s leading international financial and business centres and a key driver of the UK economy. CULTURE London s greatest cultural institutions are on the doorstep of Kensington Close Hotel with the Natural History Museum, the Victoria & Albert Museum, Kensington Palace, and The Royal Albert Hall all located within a short walk of the Hotel. London is the top European destination for international tourists ranked by visitor numbers. Olympia Exhibition Centre, Imperial College and The Royal Marsden hospital are also on its doorstep; all of which are key demand generators for the Hotel. Lifestyle Kensington is also renowned for its high end shopping, with Harrods and other luxury boutiques in the Knightsbridge and Chelsea area also within walking distance of the Hotel. Additionally, a plethora of restaurants and cafes are located along Kensington High Street, situated in close proximity to the Hotel. Hyde Park and Kensington Gardens, two of London s eight Royal Parks, are only moments away and are home to a number of famous landmarks including the Serpentine Lake spanned by the wonderful Serpentine Bridge, the Diana Memorial Fountain and the famous Wellington Monument.

8 9 LONDON HOTEL OPERATING MARKET KENSINGTON HOTEL SUB-MARKET As the most desirable hotel market in the world, London benefits from an incredibly diverse array of demand drivers and global source markets, which make for a robust and unwavering market performance. The city benefits from its geographical location between the Americas and Asia, and thus has subsequently paved the way for unrivalled financial and logistical accessibility. Today, 40% of foreign equities, more than anywhere else in the world, are traded in London whilst 89% of global cities are connected by non-stop flights at least three times a week from one of London s six international airports. The Kensington hotel sub-market benefits from all of the fundamentals that make London one of the top revenue performing hotel markets in Europe. Rich in history, culture, arts and retail, Kensington unequivocally appeals to the leisure segment and achieves impressive annual occupancy. Furthermore, the neighbourhood boasts the most highly qualified population in the UK and has thus built a reputation in the professional service sector, driving corporate demand. These abundant demand drivers, and constricted supply of new hotel stock, have resulted in robust trading dynamics with key performance indicators over the past four years consistently outperforming other international markets. London has historically proven exceptionally resilient at absorbing new stock, as illustrated below. Full-Service Royal Borough of Kensington and Chelsea (RBKC), Westminster and Wider London Hotel Market v Kensington Close Hotel Occupancy 24 months to February 2015 London HOTEL Occupancy versus Total Rooms Sold (Indexed) 2010 2014 Occupancy 100% 255 250 95% 245 90% 240 85% 80% 75% 235 230 225 220 70% 215 210 65% 205 60% 200 2010 2011 2012 2013 2014 Rooms sold x 10,000 Occupancy Rooms Sold Room Occupancy 100% 95% 90% 85% 80% 75% 70% 65% 60% Mar 13 Apr 13 May 13 Jun 13 Jul 13 Aug 13 Sep 13 Oct 13 Nov 13 Dec 13 Jan 14 Feb 14 Mar 14 Apr 14 May 14 Jun 14 Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 KCH RBKC London Westminster

10 11 CoMPETING KENSINGTON HOTELS A402 Queensway Marker Hotel Name Rooms Operator Kensington Close Hotel & Spa 708 Cola Holdings Holland Park Holland Park Avenue Notting Hill Gate Kensington Church Street Kensington Gardens Hyde Park 2 Hilton London Olympia 405 Hilton Worldwide 3 Copthorne Tara Hotel London Kensington 833 Millennium & Copthorne 4 Park International 172 Hospitality Lodging South 5 6 Holiday Inn London Kensington Forum Hotel Indigo London Kensington - Earls Court 906 Redefine BDL Hotels 100 Cairn Group 20 A3220 Kensington Olympia Holland Park A315 Kensington High Street High Street Kensington 2 3 17 A315 Gloucester Road Kensington Queen s Gate Knightsbridge Knightsbridge 7 K&K Hotel George 154 Highgate Hotels 8 Millennium Bailey's Hotel London Kensington 9 London Marriott Hotel Kensington 216 Marriott 10 Millennium Gloucester Hotel London Kensington 212 Millennium & Copthorne 610 Millennium & Copthorne 11 Ambassadors 150 Center London Hotels 12 NH Kensington 121 NH Hoteles 4 West Cromwell Road 2 A3220 A322 0 West Kensington A3220 Earl s Court Road 7 Finborough Road 12 A4 Earl s Court 13 6 9 11 4 Road 14 16 Gloucester Road 5 8 10 15 Old Brompton Road A4 South Kensington 13 Best Western Burns 104 Lowy Hotel Solutions 14 Crowne Plaza London Kensington 162 InterContinental Hotels Group 15 Harrington Hall 200 Independent 16 Radisson Blu Edwardian Vanderbilt 215 Edwardian Group 17 Royal Garden 394 Goodwood Group Not to scale. For indicative purposes only.

12 13 Connectivity The Hotel benefits from good transport links with High Street Kensington underground station (District and Circle lines) 0.2 miles north, Gloucester Road underground station (Piccadilly, District and Circle lines) 0.7 miles south east and Notting Hill Gate underground station (Central, District and Circle lines) 0.9 miles north providing access to the West End and the City. Additionally, a variety of bus routes operate along Kensington High Street connecting to all areas of London. Paddington Station (1.6 miles north east) provides national rail connections, including the Heathrow Express. Cromwell Road (A4), one of London s main arterial routes, is 0.4 miles south of the site providing direct access to the M4 and on to the M25 and national road connections.

14 15 PROPERTY OVERVIEW Kensington Close Hotel was built in 1939 as a residential club, accommodating apartments, a restaurant, recreation rooms and garages. The property was developed by Charles Peczenik, an engineer and property developer who was involved with the rebuilding of much of Grosvenor Square. The Hotel underwent a change of use and extension in 1960 to provide a 550 bedroom hotel. A further extension was completed in 2012 resulting in the room count increasing to 708. The Property comprises a full service 4-star hotel with a cafe, bar/lounge, restaurant, conference & banqueting facilities and a health club arranged over lower ground, mezzanine, ground and six upper floors. FLOOR Lower Ground Mezzanine Ground First to Sixth ACCOMMODATION Health club Car parking Staff accommodation Plant Health club changing rooms Cafe Reception Bar/Lounge Conference & banqueting rooms Restaurant Kitchen Garden Back of House Plant Guest bedrooms

16 17 Guest rooms Kensington Close Hotel provides 708 well appointed and proportioned guestrooms. The guestrooms are all en-suite and provide a good mix of modern amenities such as flat-screen TV s, individually controlled air conditioning and Wi-Fi. A breakdown of the room types can be found below. ROOM TYPE NUMBER Single Standard 78 Double Standard 195 Twin Standard 108 Double Superior 31 Twin Superior 30 Double Executive 215 Executive Club 49 Suites 2 Total 708 Food and Beverage Facilities Caffe Musetti The Hotel benefits from its own in-house cafe, Caffe Musetti. The cafe is situated in the main hotel lobby opposite the reception desks and provides informal seating in the conservatory. Lounge Bar The lounge bar is situated between the Hotel lobby and conferencing suites and serves drinks, afternoon tea and snacks in a relaxed and air conditioned seating area. Boulevard Restaurant As the main hotel restaurant, the Boulevard Restaurant is used for breakfast lunch and dinner. The restaurant provides c.300 covers and also benefits from direct access to the garden which, during the summer period, offers al fresco dining. Conferencing & Banqueting Facilities The Hotel benefits from extensive conference & banqueting facilities. All function rooms are located on the ground floor and are accessed through the main Hotel lobby, with each having access to a breakout area. All conference & banqueting rooms feature air-conditioning and audiovisual facilities. We provide below a breakdown of the conference and meeting rooms with maximum capacities and approximate areas. ROOM MAX CAPACITY SIZE SQM Buckingham 1 40 45.6 Buckingham 2 40 39.8 Buckingham 1 & 2 100 85.8 Windsor 1 60 51.4 Windsor 2 40 43.1 Windsor 1 & 2 120 94.5 St James 1 14 14.7 St James 2 14 19.6 St James 1 & 2 30 35.8 Balmoral 1 100 79.5 Balmoral 2 150 113.8 Balmoral 1 & 2 250 198.1 Balmoral 3 200 170.0 Boardroom 1 12 29.4 Boardroom 2 12 29.4 Boardroom 3 12 29.4 TOTAL 736 672.4 Leisure facilities The Hotel features a health club which operates under a management contract with Mosaic Spa and Health Clubs. The health club features a gym (with cardiovascular equipment, multi-gyms and free weights), swimming pool, sauna, steam room, hot tub, fitness studios and treatment rooms. Capital Expenditure Summary The Hotel underwent a significant refurbishment between 2010 and 2012, with approximately a 35 million being invested by Cola Holdings. The comprehensive refurbishment included updating the M&E infrastructure, renovating the health club along with approximately 500 of the existing bedrooms plus developing an additional 160 new guestrooms.

18 19 Floor plans Not to scale. For indicative purposes only. Ground Floor Not to scale. For indicative purposes only. FOURTH Floor FIRST Floor Not to scale. For indicative purposes only.

20 21 DEVELOPMENT POTENTIAL Kensington Close Hotel sits on a significant 1.59 acre site in Kensington, within prime central London. Given the location, size and age of the building, it undoubtedly provides a substantial potential redevelopment opportunity. The property is situated within the jurisdiction of the Royal Borough of Kensington and Chelsea. We understand demolition of the existing building would not be opposed, therefore offering an incredibly rare chance to create a major mixeduse new build scheme including hotel, leisure, retail and residential uses subject to obtaining the necessary consents Kensington is an established and affluent area, long known for traditional and exclusive homes, a fashionable and independent retail offering, convenient access to the West End and City as well as having pleasant garden squares and two of central London s best known parks; Kensington Gardens / Hyde Park and Holland Park. It is for these reasons that Kensington has recently been the location of a number of new build luxury residential developments; One Kensington Gardens by Lancer Property Asset Management, Vicarage Gate by Northacre, Holland Green by Chelsfield and Campden Hill by Native Land and Grosvenor. These schemes have raised the benchmark for luxury living in Kensington and redefined the area as a positive lifestyle choice. While Kensington is home to many affluent residents, it also caters to highend fashion boutiques, global brands and independent retailers. This attracts consumers from across London as well as satisfying tourism trade which circulates from attractions such as the Royal Albert Hall and Kensington Palace. Footfall is currently thought to be in the region of 15 million and current occupancy levels are high reflecting the high demand for space in Kensington.

22 23 TENURE The freehold site is comprised of four parcels of land registered with the Land Registry under title numbers BGL5315, BGL5316, BGL5317 and BGL4736. EPC METHOD OF SALE The Hotel is being marketed for sale on a private treaty basis, free of any brand or management encumbrances and subject to contract only. The Hotel is for sale through a transfer of 100% of the issued share capital of the proprietary company, Kensington Close Hotel Limited, which is a single asset Special Purpose Vehicle and which owns a 100% interest in the site. Kensington Close Hotel has an EPC rating of B 4a 1 3 14 29 to 31 Regent Court Consort Court 1 William Cobbett House 1 to 2 Surgery Ward Bdy FURTHER INFORMATION Following receipt of a signed confidentiality agreement, access to a full information pack in relation to the opportunity is available on the project website www.kensingtonclose.co.uk and includes: Investment analysis Floor plans Hotel operational information 16 to 18 Energy Performance Certificate 22 SCARSDALE PLACE DW 29 9.8m 27 CHENISTON GARDENS 70 1 to 12 14 15 Cedar House 1 to 12 14 15 Kensington Close Hotel Copthorne Tara Hotel Underground Car Park m Zetland House 1 to 12 14 15 Rutland House Surgery 2 67 TCBs 10m 20m 30m MARLOES ROAD 1 to 12 14 to 29 Falkland House 1 to 12 TCBs 14 to 23 Sutherland House El Sub Sta Stone Hall Gardens ST MARGARETS LANE Tamarind Court Aspen Lodge Stone Hall NOTE:- Reproduced from the Ordnance Survey Map with the permission of the Controller of H.M. Stationery Office. Crown copyright licence number 100024244 Savills (UK) Ltd. NOTE:- Published for the purposes of identification only and although believed to be correct accuracy is not guaranteed.

24 25 VIEWING All viewings are strictly by appointment only. Please contact the selling agents below to arrange a viewing. CONTACT George Nicholas Global Head of Hotels gnicholas@savills.com + 44 (0) 20 7499 8644 Robert Stapleton Director rstapleton@savills.com + 44 (0) 20 7409 8029 Raymond Clement Managing Director - Asia rclement@savills.com.sg +65 6415 7570 Robert Seabrook Executive Director robert.seabrook@cbrehotels.com +44 (0) 20 7182 3867 Sean Pacey Associate Director Sean.Pacey@cbrehotels.com +44 (0) 20 7182 2471 Jileen Loo Director jileen.loo@cbrehotels.com +44 (0) 20 7182 3933 Julien Naouri Associate Director jnaouri@savills.com.sg + 65 6415 7583 CEA Reg. No.: R003905I Residential Development Tim Whitmey Director twhitmey@savills.com + 44 (0) 20 7409 9999 Lizzie Parrott Associate lparrott@savills.com + 44 (0) 20 7409 9943 Important Notice Savills, CBRE and their clients give notice that: They are not authorised to make or give any representations or warranties in relation to the property either here or elsewhere, either on their own behalf or on behalf of their client or otherwise. They assume no responsibility for any statement that may be made in these particulars. These particulars do not form part of any offer or contract and must not be relied upon as statements or representations of fact. Any areas, measurements or distances are approximate. The text, photographs and plans are for guidance only and are not necessarily comprehensive. It should not be assumed that the property has all necessary planning, building regulation or other consents and Savills have not tested any services, equipment or facilities. Purchasers must satisfy themselves by inspection or otherwise. Designed and Produced by Savills Marketing: 020 7499 8644 October 2015

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