The owners of London’s Ritz hotel, a haven for royals, statesmen and movie stars, have hinted that they would be open to selling the luxury establishment for $1 billion, a source close to them said on Thursday.
Today, it offers its well-heeled global clientele 111 rooms, 25 suites, a range of bars and restaurants and the Palm Court, where an elaborate afternoon tea is served and men have to wear ties.
The Ritz has been owned since 1995 by David and Frederick Barclay, twins who also own the Daily Telegraph newspaper. The pair usually decline interviews and give little away in public about their business strategy. A source close to the twins told Reuters they had recently received several unsolicited offers for the Ritz, and its latest accounts gave a valuation for the hotel, a move that has fuelled speculation they would sell if they received a high enough bid.
The accounts said the business “is not and has not been marketed for sale”. But the source confirmed that the publication of the valuation, which was more than 800 million pounds, was a significant hint from the Barclays. The directors said in the accounts that the valuation reflected the hotel’s freehold tenure, its prime location on the busy Piccadilly thoroughfare near Buckingham Palace, the quality of the building, the casino lease and the brand name.
Turnover stood at 47 million pounds in 2018, while the operating profit was 15 million pounds, according to the accounts. Independent real estate expert Paul Olliff, said the high valuation, which relied more on the hotel’s prestige than on its financial performance, could be a hurdle to a deal.
“However, given it will be classed as a ‘trophy asset’, buyers might not be put off by a financial performance that doesn’t reflect the sale price,” said Olliff, who is a legal director at law firm Ashfords’ real estate team.