Legal & General Investment Management Real Assets has just purchased Yotel London Clerkenwell for £70 million, looking ahead to the hospitality sector recovering after the pandemic.
It is one of the first central London hotel transactions after the start of the coronavirus pandemic over a year ago.
LGIM Real Assets has bought the asset on behalf of its Managed Property Fund and it marks its first operational hotel acquisition, having seized the opportunity to acquire the hotel out of administration.
The hotel, which fits into the “lean luxury” category, has 212 “cabins” as well as an all-day restaurant, co-working spaces, a bar offering craft beers and cocktails, a gym open 24/7 and two meeting rooms. Yotel will continue to operate the hotel under a long-term management agreement.
A new building completed in May last year, the asset began operating as a hotel in August 2020. In addition to the hotel the property includes around 3,000 sq ft of retail space and five apartments totalling 5,000 sq ft. The property has strong ESG credentials with a BREEAM Excellent and EPC A rating.
Proptech improves the guest experience
Proptech also features prominently in the building, whose minimalistic design and clever use of technology includes check-in via the Yotel App and the use of SmartKeys for “a seamless guest experience”.
“Yotel London Clerkenwell is located in a prime area of London, a short walk from Farringdon Station which, with the opening of Crossrail, the Elizabeth Line, will make it one of the busiest stations in the UK, providing a fantastic opportunity to capitalise on the recovery of the London hotel market following the Covid pandemic,” said Rob Codling, senior fund manager, LGIM Real Assets.
There was substantial interest in the hotel, indicating that well-located and innovative hospitality assets continue to attract investors despite the problems caused by the pandemic.
“This sale received significant traction and we had very strong interest from a wide variety of capital sources, which only goes to show the underlying strength and belief in the London hotel market and innovative brands such as Yotel”, said Shaun Roy, partner and head of hotels, Knight Frank.
Yotel is a UK-based hotel group with a portfolio which currently comprises 15 hotels globally, including New York, Singapore, Istanbul Airport, San Francisco, Edinburgh and Amsterdam. Hotels in Glasgow, Porto and Miami are due to open this year.