Landmark hotel that is 'part of the very fabric of Edinburgh society' sold in £85m deal

Edinburgh’s iconic Caledonian Waldorf Astoria, better known as The Caley Hotel, has changed hands in a deal believed to be in the region of £85 million.

The acquisition by property fund manager Henderson Park, together with its in-house hospitality operator Klarent Hospitality, comes after the famous establishment, located at the west end of Princes Street, was bought by Abu Dhabi-based Twenty14Holdings for a similar sum of money in 2018.

Completed in 1903, the five-star 241-room hotel is an A-listed building with an iconic red sandstone façade. It boasts a long list of famous former guests having hosted Her Majesty the late Queen Elizabeth II and former US President Barack Obama, as well as Hollywood legends including Laurel and Hardy, Judy Garland, Charlie Chaplin and Sean Connery. The hotel takes its name from the Caledonian Railway Company, the original owner of the building.

Henderson Park and Klarent Hospitality said they had identified “a number of opportunities” to invest in the hotel in order to “both create value and improve the consumer experience”, including room renovations as well as upgrading and restoring public areas and facilities. It marks the third Edinburgh hotel in Henderson Park’s Klarent Hilton portfolio, having purchased the Carlton on North Bridge, at the other end of Princes Street, and the Doubletree Edinburgh Airport as part of a 2,424-room, 12-hotel portfolio acquisition in November 2021.

Nick Weber, chief executive and founder of Henderson Park, said: “This transaction presents us with a rare opportunity to acquire an iconic hotel with an incredible 120-year heritage that is part of the very fabric of Edinburgh society. As custodians of this landmark property, we have a number of planned investments that will improve the guest and visitor experience and ensure the Caley retains its status as one of Edinburgh’s most emblematic hotels going forward.”

John Brennan, chairman of Klarent Hospitality, added: “In the wake of Covid-19, Edinburgh has proven to be one of the most resilient real estate and hospitality markets in the UK. Our Edinburgh Carlton hotel, for example, delivered significant revenue per room growth last year compared to 2019, which was driven by a quicker than expected recovery in overseas tourism and business travel and supported by continued strong domestic leisure demand. Our plans for the Caledonian will ensure that it remains well placed to capture this strong demand.”

Edinburgh maintained the UK’s top spot for hotel development in a report released earlier this year, while Inverness and Glasgow joined the top ten rankings. Property firm Colliers’ hotel market index analysed the performance of 38 UK cities across ten performance indicators including occupancy figures, average daily room rates, RevPAR (revenue per available room) growth, development costs, land prices and market appetite.

The index compared 2022 data against 2019 and included Inverness for the first time, which went straight into position six, while Scotland’s largest city, Glasgow, climbed ten places to eighth position. The report noted that leisure markets had been leading the pack as the industry recovered from pandemic closures and tiered re-openings.