Luxury Hotels in London Up for Sale as Landlord Faces Tax Debt

A London landlord has won more time to sell a pair of luxury hotels as it faces a winding-up petition from UK tax authorities.

(Bloomberg) — A London landlord has won more time to sell a pair of luxury hotels as it faces a winding-up petition from UK tax authorities.

Shiva Hotels Group is attempting to sell its five-star Guardsman hotel through broker Jones Lang LaSalle Inc., people familiar with the process said. The company is also being advised by Gerard Nolan & Partners on a potential sale of the Lincoln Plaza London hotel in Canary Wharf, the people said, asking not to be identified as the processes are private.

Representatives for JLL and Gerard Nolan declined to comment. Attempts to reach Shiva Hotels by phone and email were unsuccessful.

A London court heard from lawyers representing His Majesty’s Revenue and Customs and the landlord on Wednesday. HMRC filed a winding-up petition against Shiva Hotels in April, according to public records. A lawyer acting for PwC, who appeared as a supporting creditor, said the firm was also owed just over £320,000 ($411,570) by Shiva.

The judge granted an adjournment of the hearing to Sept. 20 to allow for the sale of a hotel to help the company repay what it owes HMRC and PwC.

Shiva, founded by former Lehman Brothers derivatives trader Rishi Sachdev, also owns the boutique Middle Eight Hotel in Covent Garden.

Hotel owners were hit hard during the Covid-19 pandemic as travel restrictions damped demand. Many landlords took on additional debt to help see them through lockdowns and the anemic trading that followed.

Still, they’ve since proved among the few bright spots for commercial real estate as visitors returned rapidly in the wake of the pandemic. Many hotels operate on management agreements, meaning they can generate more revenue for their landlords in an inflationary environment than properties on long leases with fixed rents.

The Guardsman hotel fully opened in May 2021 after its original launch date was delayed by the pandemic. The Lincoln Plaza is temporarily closed due to a dispute with the development’s contractor, the people added.

A Luxembourg-based unit of Intermediate Capital Group Plc has outstanding charges against Shiva Hotels, according to public filings, while HIG Capital provided the firm with mezzanine financing backed by a portfolio of Shiva properties last year.

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