Yours for $1 billion only: the glamour of the London Ritz

LONDON (Reuters) – 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.

Opened in 1906 by Swiss hotelier Cesar Ritz, the high society

hotel hosted Charlie Chaplin in the 1920s and was used as a meeting place by Winston Churchill, Dwight Eisenhower and Charles de Gaulle to discuss

operations during World War II.

Today, it offers its well-heeled global clientele 111 rooms, 25 suites, a range of bars and restau

rants 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 fueled 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 ($980

million), 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 ($58 million) in 2018,

while the operating profit was 15

million pounds ($18.5 million),

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. “Whether it’s an inflated price or not, this should not be seen as an indication of the buoyant hotel market in the UK in a wider context, primarily because the Ritz is almost a ‘one-off.’”