Premier Inn buys City tower in London for £56m to convert to hotel

ByRichard

September 26, 2023
Premier Inn buys City tower for £56mPremier Inn buys City tower for £56m

An old office tower in the City of London has been bought to be turned into a hotel.

Whitbread, the FTSE 100 hospitality group, has paid £56.5 million for New London House. Subject to planning consent from the City of London Corporation, it intends to convert the 90,000 sq ft block into a Premier Inn. The building was bought from clients of Orchard Street Investment Management.

“We are seeing a structural shift in the London office market,” Mark Anderson, managing director for property at Whitbread, said.

Jonathan Langdon, senior acquisition manager at Whitbread, added: “The City of London’s appeal as a business and leisure destination continues to underwrite our investments in new hotel developments in the Square Mile.”

Owners of older office buildings face a dilemma about what to do with their properties. Increasingly occupiers only want the best, greenest workspaces, which means landlords must invest heavily or risk missing out on the best tenants and rents. The alternative is to repurpose blocks or sell them.

Although the idea of repurposing old offices has come back to the fore after the pandemic, it is not new. Whitbread did its first office-to-hotel conversion with London’s County Hall back in 1998.