London: Indian businessman Yusuffali M.A. has agreed a £110 million ($171 million) deal to develop a luxury hotel on the site of the original Scotland Yard Police Station in London, as foreign buyers bet on the resilience of Britain’s prime property market.
Ali, one of India’s wealthiest entrepreneurs and head of Abu Dhabi-based retail and hospitality conglomerate Lulu Group International, has signed up Galliard Homes to complete the project at the former home of the Metropolitan Police Force in London’s Whitehall.
“London undoubtedly is one of the most happening locations in the world, especially from the tourism point of view, and we have been actively evaluating investment opportunities that both grow our footprint and contribute to the further development of London," Yusuffali M.A. said in an emailed statement on Monday.
Twenty14 Holdings is the newly launched hospitality arm of LuLu, focusing on acquisition and management of assets around the globe. The entity has more than 1 billion dirhams ($272 million) of assets in the Middle East, the UK and India.
Yusuffali, a Kerala-born businessman, is the latest in a slew of foreign buyers who have shaken off mounting fears of a “Brexit" from the European Union and possible economic contagion from the stricken euro zone, to invest in prime UK real estate.
The asset class, particularly London trophy property, is widely seen as recession-proof, thanks to consistently rising values and robust rents that appear to defy domestic and global economic shocks.
Chinese buyers seeking safe quarters for their cash against a backdrop of increasing turbulence in their domestic stock markets are among those competing for prime London property.
An ultra-low interest rate environment and central bank money printing have driven down bond returns and fuelled demand for UK hotel investment, with first-quarter deal volumes up 38% year-on-year at €1.22 billion ($1.35 billion), data from property adviser CBRE shows. This is almost double the investment volumes recorded in the second-most attractive market of Germany, CBRE said.
Prime London hotel investments offered typical yields of 4.25% in the first quarter, compared with 1.91% offered by 10-year UK Gilts or 0.63% offered by 10-year German bunds, according to latest market data.
Steigenberger Hotel Group has been selected to operate the 92,000sq.ft hotel when it opens early next year.
The property, made famous by novelists Charles Dickens and Sir Arthur Conan Doyle, was occupied by the capital’s fledgling ‘Met’ police force between 1829 and 1890. It was here that the famous Jack the Ripper crimes were investigated.
New Scotland Yard, the most recent headquarters, was sold to Abu Dhabi Financial Group for £370 million in December. Reuters