Industry lender buys major property group

An industry lender has saved one of the best known names in the UK hotel industry from doom after its parent company crashed into administration.

Topland Property Group, led by brothers Sol and Edward, has acquired 12 of the 15 hotels belonging to bankrupt UK hotel chain, Menzies Hotels.

Topland paid around £85 million for the acquisition, which was structured as a purchase of the parent company of the hotel chain.

The purchase was made directly from the company’s administrators, KPMG.

Announcing the deal, Sol Zakay, Founder of Topland group, said: “This acquisition was an exceptional opportunity to acquire a profitable, highly rated hotel group which provides an excellent additional platform for us to drive forward our strategy of building a £1bn hotel platform. The Group as a whole is entering a particularly active phase across a number of fronts including property investment and property lending.”

Topland purchase 12 hotels all mid-range in price position in the marketplace, nominally four star, and all with respective freeholds included in the purchase.

The three remaining hotels of the 15-strong portfolio were all short-term property leases, therefore rendering them non-compliant with Topland’s portfolio criteria.

KPMG were appointed administrators on the Menzies case, after Cordial – the company’s parent - defaulted on a restructured £165 million senior debt facility with Lloyds Banking Group.

Bank of Scotland, the legacy legal entity from Lloyds’ 2009 acquisition of HBOS, restructured a three-tranche senior facility nearly two years ago with Cordial Hotels after dwindling repayments began to catch up on the company formed out of a management buyout from former Chief Executive Tim Penter.

The portfolio of hotels, made up of 15 premium hotels around the Country, was passed on to Christie + Co to handle the sale.

The hotels range from London to Glasgow, Bournemouth to Birmingham and even the head office in Kent.

According to Christie + Co’s public accounts, last year the hotel chain raked in £43.2 million, with two of the hotels each turning over just short of £6 million each.

Topland has appointed Bespoke Hotels, the UK’s largest operator of independent hotels to operate the group, taking its portfolio to over 100 and adding further geographical reach across the UK.