UK: Shiva Hotels – a UK-based hotel group – is to support Hotel Income REIT by planning to raise £150 million in an initial public offering (IPO).
Established in 2001, Shiva Hotels is a privately owned family business under Rishi Sachdev. Shiva created the REIT to enhance its investment opportunities.
The capital raised in the IPO will be invested in Shiva’s current portfolio of five Hilton-branded hotels in London and New York.
Sachdev said that capital for new investments would then come from subsequent fundraising rounds: “All of the assets being deployed are income producing. This would give investors clarity about where the dividend is coming from.”
He continued: “We make a good profit out of developing new sites, but also create good, long-term income for the REIT. If we can build up our track record and reputation in the public market, then access to capital will become more simple for us.”
According to Sachdev, investors have shown a keen interest in Hotel Income REIT despite the uncertainties surrounding Brexit: “Investors have told us that this is a rare opportunity to invest in income-producing, purpose-built assets. These are all the sorts of things that make them feel comfortable, especially with the Hilton brand attached.”
Sachdev therefore hopes that the IPO will be oversubscribed.
Included in Shiva’s portfolio is The Lincoln Plaza London, a Curio Collection by Hilton. Their latest development, The Guardsman, is set to open in 2020.
Last November, Shiva entered into a joint venture with the Reuben Brothers to develop a 200-room luxury hotel under a new brand. It will be developed across two different sites in Soho.
