Grand Canal Capital Partners
Hilton Olympia has been starved of capex since 2022 — priced like a midscale asset in an upper-midscale market. The current owner pursued a 905-key demolition strategy that paused. The reset creates a rare opportunity to acquire a freehold London hotel below prior basis, with execution risk that is operational, not speculative.
At £265/key, the asset is priced like a transitional or vacant-possession hotel. Stabilised, franchised London comparables trade at £390–619/key. The discount reflects the paused redevelopment strategy, not the asset.
£30m phased capex (£74k/key) delivered floor-by-floor. Rebrand to DoubleTree within the Hilton ecosystem. Flip from management to franchise. NOI more than doubles from £4.6m current EBITDA to £9.6m stabilised by Year 5.
Franchised London hotel transactions have priced at 5.0–5.75% yields (Westminster Curio 5.1%, Holiday Inn Kensington 5.5%, Edwardian Portfolio 5.6%). Total cost basis of £143m sits well inside the exit-value range — before tax and any planning-optionality upside.
The deal is assembled. The operator is sourced. The model is built. What remains is the equity to execute.
Off-market access via JLL · operator (BGAM) engaged · Hilton received the rebrand thesis positively.
£54.3m equity · 63% LTV senior debt @ 7% · share acquisition · Year-3 refinancing built into the plan.
Single LP, joint LP or club structure available · Grand Canal acts as GP/sponsor · governance scaled to partner profile.
405 keys across 8 floors. 17,400 sq m on 0.88 acres. The corner of Kensington High Street and the Olympia London regeneration zone. Built 1966, part-refurbished in 2022 (141 keys) — the bones are sound, the product is dated.
Hilton Olympia trades through the entire business plan. Existing cashflow protects the equity through the refurbishment programme; the asset is never closed; the strategy can be reversed at any stage if market conditions shift.
The £107.5m entry is ~17% below the £130m transaction basis from 2022. The reset is driven by the prior owner's failed demolition-led strategy. The real estate, the trading, and the location are all stronger today than they were in 2022.
Olympia London is being transformed from an exhibition centre into a year-round destination. The Hotel captures the upside without development risk or planning exposure — major demand anchors are being delivered by others.
16,000+ rooms · 82%+ blended occupancy · high barriers to entry from dense residential surroundings · predominantly older stock — a refurbishment-led environment, not a development one.
The submarket's upper-midscale tier achieves 87.5% occupancy and £144 ADR. Hilton Olympia, in the same location and at greater scale, achieves £120 ADR. The gap reflects product condition and brand position — not demand.
Pricing aligns with economy / legacy midscale tier — well below the upper-midscale benchmark the asset's location supports.
Post-refurbishment and DoubleTree rebrand · competitive parity with upper-midscale peer set at RGI of 95, MPI of 102.
Anchored to a refurbished product and a clearer brand position — not aggressive demand assumptions.
A sequenced plan that protects cashflow throughout. The hotel trades through the entire refurbishment programme — value is created by execution, not by a closure-and-reopening punt.
Costs at Q2 2026 price levels, excluding VAT, professional fees and inflation. Including professional fees at 10%, total capex initial estimates are c. £33m. Reviewed by BGAM operations team against Hilton PIP requirements for DoubleTree conversion.
| Cost category | Scope | £m | £ / key | % of total |
|---|---|---|---|---|
| Guestrooms & bathrooms | Full refurbishment to DoubleTree standards — rooms, bathrooms, corridors | 13.5 | £33,300 | 45% |
| Public areas & F&B | Lobby, reception, bar, restaurant interfaces, meeting rooms | 4.5 | £11,100 | 15% |
| Back-of-house | Staff areas, kitchens, storage, service corridors | 2.0 | £4,900 | 7% |
| MEP & life-safety | M&E upgrades, fire, energy, compliance works | 5.0 | £12,300 | 17% |
| Technology | IT, PMS interfaces, guest tech, AV, connectivity | 1.0 | £2,500 | 3% |
| FF&E / OS&E | Furniture, fixtures, fittings and operating equipment | 2.5 | £6,200 | 8% |
| Contingency (5%) | Client contingency allowance | 1.5 | £3,700 | 5% |
| Total hard capex (ex-VAT, fees, inflation) | £30.0m | £74,000 | 100% | |
| Plus professional fees at ~10% | ~£3.0m | ~£7,400 | — | |
| All-in capex estimate | ~£33.0m | ~£81,400 | — | |
Source: BGAM STDD Base Case · Hilton PIP scope estimate · Q2 2026 price levels.
The bridge is anchored in real benchmarks: stabilised occupancy of 85% (consistent with the top-10 largest London hotels) and an ADR of £184 (in line with the upper-midscale peer set), not aspirational assumptions. Years 1–2 occupancy is intentionally moderated to absorb the floor-by-floor refurbishment.
| Year | Occ. | ADR | RevPAR | NOI |
|---|---|---|---|---|
| 2025A | 83.6% | £120 | £103 | ~£2.0m |
| 2027 | 70.0% | £126 | £89 | £2.3m |
| 2028 | 72.0% | £130 | £94 | £3.3m |
| 2029 | 84.0% | £156 | £131 | £6.8m |
| 2030 | 85.0% | £175 | £149 | £8.8m |
| 2031 | 85.0% | £184 | £156 | £9.6m |
RevPAR CAGR 13.7% (nominal) / 11.5% (real). Stabilised NOI conversion of 40.8% — driven by improved Rooms revenue, F&B repositioning, and reduced fee drag following management → franchise transition.
Senior debt sized to total project cost at 63% LTV. Senior facility priced at 7% all-in. A planned Year-3 refinancing on the back of the repositioned, rebranded asset returns ~£12.8m of equity — meaningfully de-risking the LP position before the exit decision.
| Uses | £m | % | |
|---|---|---|---|
| Purchase price | 107.5 | 73.0% | |
| Hard capex (phased Yr 1–3) | 30.0 | 20.4% | |
| Professional fees & transaction costs | ~5.0 | 3.4% | |
| Working capital & reserves | ~4.7 | 3.2% | |
| Total uses | £147.2m | 100% | |
| Sources | |||
| Senior debt | 92.7 | 63.0% | |
| LP equity | 54.3 | 37.0% | |
| Total sources | £147.0m | 100% | |
Indicative · final allocation subject to debt-term confirmation and capex draw schedule. Senior debt input by Andy / GCCP — may flex.
| LTV at entry | 63% |
| All-in rate | ~7.0% |
| Facility size | ~£92.7m |
| Initial term | 5 years (refi Y3) |
| Amortisation | Interest-only with cash sweep |
Refinanced on the repositioned, rebranded asset against improved trading. Returns ~£12.8m to LPs — c.24% of initial equity — ahead of the exit decision.
| Refi trigger | 2029 NOI £6.8m |
| Refi proceeds to LP | ~£12.8m |
| Residual equity outstanding | ~£41.5m |
All returns shown pre-tax. Capital allowances of £9–10m are potentially available and not in the model. Corporation tax and CGT treatment depend on the eventual buyer structure (share acquisition; potential stamp duty efficiency subject to advice). These are upsides, not assumed sources of return.
Levered LP returns at the base case. Sensitivity below stresses the variable that matters most at exit — the cap rate. Even at a 6.0% exit yield (above current franchised comp evidence), the 5-year levered IRR remains comfortably double-digit.
| Hold | Levered IRR | Equity Multiple | Exit Yield | Implied Exit £ |
|---|---|---|---|---|
| 5 years | 16.0% | 1.95× | 5.25% | ~£183m |
| 10 years | 10.3% | 2.28× | 6.00% | ~£185m |
| Stabilised NOI (Y5) | 5.00% | 5.25% | 5.50% | 5.75% | 6.00% |
|---|---|---|---|---|---|
| £9.0m | 14.2% | 12.9% | 11.7% | 10.6% | 9.5% |
| £9.3m | 15.4% | 14.1% | 12.9% | 11.7% | 10.6% |
| £9.6m (Base) | 17.4% | 16.0% | 14.6% | 13.4% | 12.2% |
| £9.9m | 18.6% | 17.2% | 15.8% | 14.5% | 13.4% |
| £10.5m | 21.0% | 19.5% | 18.1% | 16.8% | 15.6% |
Cells show 5-year levered LP IRR. Base case shaded. Green = above 14%. Red = below 10%. Stabilised NOI from BGAM 5-year projections; exit yields anchored to franchised London hotel comp set.
Reading the matrix: the base case sits at NOI £9.6m / exit 5.25% (= ~£183m gross value). The comp-evidenced franchised yield range is 5.0–5.75%. Returns hold above 12% across the entire credible cap-rate band — even with a 10% NOI underrun.
GCCP fees are weighted toward carried interest on net profit, not front-loaded fees. The LP net-of-GP return remains comfortably double-digit at the 5-year hold.
| Fee component | Rate / basis | Approx. £ |
|---|---|---|
| Acquisition fee | 0.40% of purchase price · one-off at close | ~£430k |
| Asset management fee | £150,000 / year · flat | £150k p.a. |
| Carried interest · 5-yr exit | 4% of net profits on exit | ~£727k |
| Carried interest · 10-yr exit | 4% of net profits on exit | ~£1.07m |
| Total GP economics · 5-yr hold (illustrative) | ~£1.9m | |
Total GP take across the 5-year hold (acq fee + AM fee + carry) is ~£1.9m against ~£51.6m of LP profit at the base case. The drag on IRR is <100bps — taking the 5-year LP net IRR to ~15.1%.
| Metric | 5-yr | 10-yr |
|---|---|---|
| LP IRR · gross of GP | 16.0% | 10.3% |
| LP IRR · net of GP | ~15.1% | ~9.6% |
| LP MOIC · net of GP | ~1.91× | ~2.22× |
Indicative net calculation. Final waterfall subject to LP documentation and hurdle structure.
Hilton Olympia today aligns with the transitional cohort — management-operated, capex still to be deployed, earnings below stabilised potential. The plan progresses the asset toward the highlighted franchised peer set, where transaction evidence supports the £174–192m exit-value range.
| Year | Asset | Location | Keys | Price (£m) | £ / Key | Yield | Structure |
|---|---|---|---|---|---|---|---|
| 2026 | The Westminster (Curio, Hilton) | Westminster | 464 | 287 | £619k | ~5.1% | Franchise |
| 2026 | St Giles London | Bloomsbury | 732 | 280 | £382k | ~6.8% | Vacant Possession |
| 2025 | Holiday Inn Kensington High Street | Kensington | 706 | 280 | £397k | ~5.5% | Franchise |
| 2024 | Novotel London West | Hammersmith | 630 | 229 | £364k | n/a | Vacant Possession |
| 2024 | Edwardian Hotels Portfolio | London (various) | 2,053 | 800 | £390k | ~5.6% | Franchise |
| 2024 | Residence Inn Portfolio | London | 503 | 229 | £455k | 6.9% | Franchise |
| 2023 | Hyatt Place London City East | Aldgate | 280 | 85 | £304k | ~5.1% | Franchise |
| 2023 | Nobu Shoreditch | Shoreditch | 148 | 50 | £338k | <2.0% | Vacant Possession |
| 2022 | Park Grand London Kensington | Kensington | 132 | 62 | £470k | <6.0% | Vacant Possession |
| Project Olympia · entry | 405 | 107.5 | £265k | — | Mgmt → Franchise | ||
Source: JLL Hotels & Hospitality · BGAM. Highlighted rows indicate stabilised franchised transactions — the reference set for Project Olympia's exit.
| Stabilised yield | Implied value | Uplift vs total cost (£143m) |
|---|---|---|
| 5.00% | £191.7m | +£48.7m |
| 5.25% | £182.6m | +£39.6m |
| 5.50% | £174.3m | +£31.3m |
| 5.75% | £166.7m | +£23.7m |
Stabilised NOI £9.584m (Year 5, BGAM model).
Planning granted October 2023 under the prior demolition strategy — 11-storey, 905-room scheme across 25,810 sq.m GIA. Estimated construction cost ~£163m / £180,085 per key. Pure upside for an incoming buyer with a different capital structure or time horizon.
BGAM was built by hotel owners, for hotel owners. The platform operates 10 hotels and 1,000+ keys across the UK, with deep experience in brand conversions and managed-to-franchise transitions — exactly the playbook required for Hilton Olympia.
UK's first Delta by Marriott conversion, delivered at speed. First-time Marriott Fire Life Safety approval — a standard very few operators secure. Full repositioning aligned with international brand requirements.
Listed-building refurbishment. Repositioned under Mercure by Accor. Rebuilt the commercial engine — leisure, spa, events, weddings. Leisure revenue +100%. Weddings expanded to 150+ events / year.
Operating within a highly regulated government scheme. Rigorous operational controls implemented. Strongest-performing asset within the scheme — now the benchmark for other operators nationwide.
The plan is delivered against an existing income stream, with phased deployment of capital and brand engagement already underway. The principal risks are execution risks, addressable by the operating team and structuring.
Floor-by-floor refurbishment risks key displacement, complaints, or RevPAR drag during Year 1–2 works.
Phased delivery aligned to seasonality & event calendar. Hotel trades throughout. Occupancy intentionally moderated to 70–72% in works years; pricing protected. Public areas refreshed early.
£30m hard capex plus £3m fees has cost-inflation, scope-creep and contingency-burn risk.
5% client contingency baked into the £30m. Disciplined governance under BGAM principal oversight. Scope, phasing, and PIP requirements finalised pre-spend in Phase 1.
Rebrand to DoubleTree and management-to-franchise flip require Hilton approval — both are HMA-permission dependent.
Early Hilton engagement underway and received positively. HMA runs to 2035 with two 10-yr extensions, so rebranding is only viable within the Hilton ecosystem. DoubleTree base case is the lowest-friction path; Curio Collection is upside.
London hotel cap rates, travel demand, FX, and macro events could compress the exit.
Conservative underwriting — base case exit at 5.25% vs comp evidence at 5.0–5.5%. Sensitivity matrix in §9 shows LP IRR holds above 12% across the credible cap-rate band even with NOI underrun.
Hyatt Regency Olympia (204 keys) and citizenM Olympia (146 keys) open in 2026 — risks fragmenting demand.
Different positioning lanes — citizenM lifestyle, Hyatt premium-upscale, Hilton Olympia high-occupancy full-service core. Combined ~476 keys is 2.9% of submarket inventory. Validates the destination rather than threatening it; raises pricing discipline across the set.
~£107.5m vs £130m prior basis. £265/key vs comp set £390–619/key.
Submarket trades at 87.5% occupancy. New supply validates rather than threatens.
£120 → £184 ADR. Positioning gap, not demand weakness.
£2.3m → £9.6m by Year 5 · anchored to peer-set benchmarks, not aspiration.
Pre-tax returns. Capital allowances (£9–10m) and 905-key planning consent not in the case.
BGAM founder-led operator. Carried-interest-weighted GP economics. Hilton engagement positive.