Billionaire twin brothers Sir David and Sir Frederick Barclay have recently ploughed millions into the iconic Ritz Club amid reports that they have entered the early stages of a deal for the sale of The Ritz Hotel.
The Ritz Club is a high-end casino located in the basement of The Ritz. It features some of the most popular table games. While previously a hot spot for wealthy gamblers, the gaming facility has now been underperforming for an extended period of time.
According to corporate documents, the Barclay twins have spent £8 million on the gambling salon after entering initial stages of offloading The Ritz to interested investors. It is still unknown whether The Ritz Club would be part of the sale deal.
According to company records, the casino has not turned a profit since 2016 due to ongoing regulatory pressure on the UK gambling market and a decline in the number of high rollers from the Far East.
The Ritz Club posted a pre-tax loss of £8.9 million for the year to December 31, 2018. In 2017, the gambling salon recorded a £11.3 million pre-tax loss, but the Barlcays spent £10 million on the operation.
The billionaire businessmen bought The Ritz along with its casino for £75 million in 1995. Aside from the Ritz Club, the property also features 111 hotel rooms and 25 suites, a range of food and beverage outlets, and the iconic Palm Court which hosts the famous Traditional Afternoon Tea at the Ritz.
Sale Reportedly Under Way
It emerged earlier this month that the Barclays were reviewing interest from a Saudi Arabian private investment firm to sell The Ritz. While the amount offered for the five-star hotel in London’s West End was not disclosed, it is believed that the billionaire brothers are asking for at least £750 million for the property.
According to reports, investment group Sidra Capital was the party interested to buy The Ritz from the Barclays. The company is headquartered in Saudi Arabia with offices in Jeddah, Riyadh, and London.
Sidra has been looking to enter London’s hotel sector for some time now. In 2018, the company lost a bid to acquire Grosvenor House on Park Lane. It currently owns a number of properties across the UK, including Kinnaird House near Trafalgar and St. James’ Squares in the British capital.
The firm has additionally invested in buildings across Scotland on lease to Sainsbury’s as well as a Travel Lodge near Terminal 5 of Heathrow Airport. It also managed property in the Netherlands, the US, and the UAE.
Speculations that the Barclays were looking to sell The Ritz have been floating around since last October when it emerged that the twin businessmen had been approached with unsolicited bids for the property. Sources further noted that the luxury hotel’s current owners might be ready to offload it, if they received a high enough offer.
The potential sale speculations were further fueled by the fact that the property’s latest financial accounts included valuation for The Ritz. Its estimated value stood at around £800 million and reflected the hotel’s freehold tenure, prime location not far from the Buckingham Palace, the quality of the building, the brand name, and the casino lease.
Source: Barclay twins sink £8m into casino as buyers circle The Ritz
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