Shiva Hotels, a prominent UK hotel group, is making efforts to sell two of its luxury London hotels amid financial challenges. The company is looking to offload the five-star Guardsman hotel through the services of broker Jones Lang LaSalle Inc. Additionally, Shiva is being advised by Gerard Nolan & Partners on the potential sale of the Lincoln Plaza London hotel in Canary Wharf. Both sales processes are being conducted privately, according to sources familiar with the matter. However, representatives from JLL and Gerard Nolan declined to comment on the situation.
The hotel group has found itself entangled in legal proceedings as it faces a winding-up petition filed by the UK tax authorities (HMRC) against its related entity, Shiva Hotels Group LLP. This petition was lodged in April, and the court recently heard from lawyers representing both HMRC and Shiva Hotels Group LLP. In the hearing, a lawyer representing PwC, acting as a supporting creditor, revealed that the firm was owed over £320,000 by Shiva.
To address its financial obligations and repay what is owed to HMRC and PwC, the company has been granted an adjournment of the hearing until September 20. During this period, the hotel group plans to finalize the sale of one of its hotels, which would provide the necessary funds for repayment. The group has clarified that it holds no ownership, control, or interest in the hotels through Shiva Hotels Group LLP, an independent limited liability partnership, as confirmed by a lawyer representing the group.
Shiva Hotels Group LLP stated that it is working closely with relevant parties to ensure it meets its financial obligations. The company remains confident in the terms of the agreement and continues to engage in ongoing conversations and partnerships as the hospitality industry rebounds from the impacts of the Covid-19 pandemic. The hotel group, founded by former Lehman Brothers derivatives trader Rishi Sachdev, also owns the boutique Middle Eight Hotel in Covent Garden. Sachdev is listed as a member of Shiva Hotels Group LLP and a director of special purchase vehicles that own the hotels, according to public filings. Like many in the hospitality industry, hotel owners faced significant challenges during the pandemic, with travel restrictions severely impacting demand. Many hotel landlords incurred additional debt to weather lockdowns and the subsequent sluggish trading period.
Despite these challenges, hotels have emerged as one of the few bright spots in commercial real estate as visitors returned rapidly after pandemic restrictions eased. Operating on management agreements, hotels can generate more revenue for their landlords, especially in an inflationary environment, compared to properties on long leases with fixed rents. The Guardsman hotel finally opened in May 2021, after its original launch date was postponed due to the pandemic. On the other hand, the Lincoln Plaza hotel is currently closed due to a dispute with the development’s contractor, according to sources.
Public filings reveal that a Luxembourg-based unit of Intermediate Capital Group Plc holds outstanding charges against Shiva Hotels, while HIG Capital provided the firm with mezzanine financing supported by a portfolio of Shiva properties last year.
