Land Securities, the largest commercial property developer in the UK, is gearing up to offload £500m of hotel assets from its portfolio.
Several of the hotels that the firm could sell are in London, including its Hammersmith Novotel branch, which is valued above £50m.
The preparations were first reported by React News.
A Land Securities spokesman said: “We’ve made it clear that our strategy is focused on shaping three types of place that connect to our purpose: retail destinations, office clusters knitted into the fabric of our cities, and mixed-use, living led sustainable neighbourhoods.”
“Anything that doesn’t fit into that strategy is being reviewed.”
The firm owns 21 hotels, spread across the UK in cities such as Manchester, Glasgow and London. Knight Frank have been instructed to act as agents to support the sales process.
Land Sec reported sharp falls in profits in May after tenants struggled to service rent payments amid ongoing Covid restrictions that suppressed demand in the leisure and hospitality sectors and commercial property valuations plummeted.
Landlords have faced tough choices over whether to dispose of non-performing real estate assets, especially in the hotel sector, or bet on a recovery in valuations after Covid restrictions are lifted and demand floods back.