Qatari Royal Refinances $485 Million Loan for Shut London Hotels

(Bloomberg) -- London’s most exclusive hotels are largely shut and banks have tightened credit, but financing is wide open for Qatar’s former prime minister.

Companies controlled by Sheikh Hamad bin Jassim Al Thani got a 10-year loan to refinance a 392 million-pound ($485 million) loan against London hotels the Connaught and the Berkeley.

Citigroup Inc. arranged the mortgage, which was financed by a German lender, a U.K. investment manager and a U.K.-based debt fund, said Russell Gould, Citigroup’s co-head of commercial real estate finance for Europe, Middle East and Africa.

This “speaks to the resilience of the London luxury hotel market, which continues to attract interest from investors, and points to an obvious flight to quality,” Gould said.

Known as HBJ, Al Thani was a prolific dealmaker during his time as prime minister and head of the state’s sovereign wealth fund. He spearheaded the Gulf nation’s investments in Harrods, Volkswagen AG and the Canary Wharf financial district. He was also a key broker in Glencore Plc’s takeover of Xstrata and the 2008 bailout of Barclays Plc, in which Al Thani personally invested alongside the state. Since stepping down in 2013, he’s also invested on his own behalf.

Constellation Hotels, linked to Al Thani’s family office, bought a stake in Maybourne Hotel Group in 2015 from the billionaire Barclay brothers.

Maybourne runs the Connaught, the Berkeley and Claridge’s, another five-star hotel in London where rooms typically cost more than $700 a night. The group acquired its first U.S. hotel last year, the Montage Beverly Hills in the heart of the California city’s luxury shopping district.

Maybourne’s press office didn’t respond to a call and email seeking comment on the debt.

The new loan replaces one with Qatar’s Barwa Bank QSC, which would have matured in 2022.

Interest rates in the U.K. have tumbled to a record low because of the coronavirus, but hotels have been hit by measures to stop the pandemic. Maybourne shut its three hotels in late March, though Claridge’s in Mayfair reopened to cater to National Health Service staff.

The crisis also hasn’t deterred Qatari investors from investing in London. Law firm Macfarlanes said in a statement last month that it advised one of its clients from the Gulf state on the acquisition of the Ritz Hotel from the Barclay twins.

©2020 Bloomberg L.P.

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