NEW YORK CITY — Indian-based conglomerate Sahara India Pariwar has closed on its purchase of a 75 percent stake in the Plaza Hotel, a landmark 20-story property in New York City.
Sahara reportedly paid $431 million for the 230-room hotel, which carries a total asset value of $575 million.
The stake was purchased from El Ad US Holdings. Sahara will now partner with Kingdom Holding Co., which retains a 25 percent stake in the property. Kingdom Holding is controlled by Saudi billionaire Prince Alwaleed bin Talal.
The hotel will continue to be managed by Fairmont Hotels & Resorts.
Built in 1907, the Plaza Hotel occupies the west side of Grand Army Plaza and extends along Central Park South in Manhattan. Its notable guests have included the Beatles, Eleanor Roosevelt, Mark Twain and Groucho Marks. The property is also one of only two New York hotels to be designated a National Historic Landmark (the other is the Waldorf-Astoria).
“This was a great opportunity for the buyer to expand into a key U.S. market with the purchase of an irreplaceable asset,” says Greg Rice, president of Solid Rock, the real estate brokers that represented the seller in the transaction. He added that the location on the corner of 59th and Fifth Avenue is “arguably one of the world's most valuable pieces of real estate.”
Sahara Indian Pariwar is a major conglomerate in India, active in finance, media entertainment, housing and healthcare among other industries. The Plaza Hotel is not the group's first overseas hotel acquisition. In December 2010, the company purchased the iconic Grosvenor House Hotel in London for $726 million.
Also in New York, Sahara is reportedly about to acquire the Dream Downtown Hotel, according to India Today. Sahara chairman Subrata Roy has made an offer to acquire an 85 percent stake in the hotel, which is valued at $100 million.
Rice says New York remains an attractive market to investors. “It is the world's most liquid market and is excellent for capital preservation as it consistently outperforms inflation.”
He adds, “While luxury hotels in New York have been one of the harder hit segments of the hospitality industry, they will benefit from strong growth as room rates return to their peak levels.”
— Liz Burlingame