Queensgate Investments Fund I and a number of private investors (the 'Consortium') announce the creation of a $450 million (approx. 336 million) Joint Venture which has exchanged contracts with Anschutz Entertainment Group ('AEG') to buy a 3 hectare riverfront hotel led site directly linked to the O2 Arena, on the Greenwich Peninsula, London. AEG has retained an interest in the development.
The Consortium will build a 452 room luxury hotel, which will be one of Europe's largest hotel conference centres with circa 30,000 ft² (approx. 2,800 m²) of conference space, and 100 private serviced residences. Construction is expected to begin in the first quarter of 2013 with completion due in 2015.
A hotel management contract will be entered into with Arora, which operates in excess of 2,800 rooms in the UK, and franchise agreement heads of terms have been secured with one of the world's leading hotel brands. Committed bank facilities from two banks have been procured by the Consortium. Jones Lang LaSalle has been appointed to sell the 100 private serviced residences.
The O2 Arena is the most visited music venue in the world attracting in excess of eight million visitors and hosting over 190 sold out events per year. The development benefits from a direct link to the O2 Arena, riverfront views of Canary Wharf, privileged O2 Arena ticketing arrangements for residents, and close proximity to extensive transport links including North Greenwich Tube Station, Blackwall Tunnel, London City Airport and Canary Wharf.
Jason Kow, Chief Executive of Queensgate Investments LLP commented: "The transaction underlines our strategy to pursue opportunities with downside protection, partnerships with premier operating partners, and transactions with multiple value creation angles. We have immense respect for the Arora team and consider them to have one of the UK's leading hotel management platforms. We look forward to working with our private investors and the Arora management team to collectively build a highly successful landmark scheme."
Surinder Arora, Founder and Chief Executive of Arora, said: "I am delighted to be involved in such a high profile scheme in a fantastic location next to the O2 offering a unique marketing and events opportunity. The development will add high quality accommodation and conference inventory to a vibrant and growing part of London which has recently been exposed to the world stage with the Summer 2012 London Olympics."
Jay Marciano, President and CEO of AEG Europe, added: "On behalf of AEG Europe and The 02, we are delighted to participate in this important transaction. We believe the development of the luxury hotel, conference center and serviced apartments is a strong endorsement of the progress we have made in further establishing The O2 as the UK's leading entertainment destination. We are confident this new offering will delight entertainment consumers from around the world."