Member Article

EasyHotel could be forced to sell its Old Street property after running afoul of planners

Budget hotel chain easyHotel has warned of the ‘adverse impact’ on its earnings after Islington Council upheld its refusal of retrospective planning permission at the hotelier’s Old Street property.

The chain had appealed a decision by the council after its retrospective planning application for a 78 room extension at its 162-room property in Clerkenwell was rejected due to Islington Council’s policy to protect office space in the borough.

Their appeal has now also been thrown out and easyHotel is now facing up to the prospect of a full or partial sale of the building, which sits a few minutes’ walk from Old Street Roundabout and its thriving tech hub.

The property itself was originally acquired by easyHotel for £10m in June 2012 as a 92 room hotel, which was subsequently expanded to 162 bedrooms in March 2014, crucially without planning permission.

EasyHotel has said that the property currently has a net book value of around £13m but said it is ‘confident’ it can achieve a full sale in excess of that figure, or that it would look to concentrate the hotel operations on the ground, first and second floors and sell off the remaining floors.

As a result of the decision, the hotelier has warned that there will be a ‘short term adverse impact’ on its earnings this financial year as it proceeds with a sale, but that full sale could potentially unlock the development of a further 500 rooms across the UK.