The Ritz worth £600m despite the credit crunch say owners
The Barclay brothers, the secretive owners of the Telegraph Group, claimed that the value of their trophy property asset, London's Ritz Hotel, soared by a fifth last year to a record £600m, despite plummeting prices across the commercial real estate sector.
In recently filed accounts, for the year ended December 31 2007, Ellerman Investments, which owns the Ritz Hotel, The Ritz Club Casino and The Cavendish Hotel, said London's most famous hotel could be worth in more than £600m.
Ellerman Investments is the largest holding company of Sir David and Sir Frederick Barclay, who are ranked joint 40th in this year's Sunday Times Rich List with an estimated £1.8bn. It is managed by David's son, Aidan Barclay.
The report said: "The directors believe that, with the significant increase in values since 2001 and following several unsolicited approaches and offers to purchase the hotel, taking into account its freehold tenure, the location, the refurbished condition and the unique Ritz brand name, it would attract a buyer at a price in excess of £600m."
The 132-bedroom hotel has not been revalued since July 2001, when property consultant Jones Lang LaSalle said it was worth £150m. Last year Ellerman claimed it was worth £500m. According to property magazine, Estates Gazette, the Barclays brothers bought the hotel for around £65m in 1995.
The rise in valuation came during a period when commercial property had started to see falls as a result of the ongoing credit crunch. Since then, valuations have continued to plummet, with Credit Suisse last month arguing that values had fallen 25% for the year to date.
However, Jeremy McGivern, director of property company Mecury Homesearch, said he believes top-end hotels are well insulated against the financial crisis, and ultra high net worth individuals are still happy to spend a small fortune on a few nights in a hotel.
Ellerman Investments also reported a pretax loss of over £25m for the year ended December 31 2007 and £8.7m the year before. Turnover was up during the period from £63.8m to £80.3m. A spokesperson for the Barclays did not immediately return calls.
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