Fattal takes control of London’s The Dilly in one of its biggest hotel investments yet
The Israeli hospitality group will invest roughly £220 million in acquiring lease rights and renovating the 283-room property, aiming to turn the historic hotel into a major European asset.
Fattal is investing £66.5 million (approximately NIS 275 million at the current exchange rate) to acquire the master lease rights to the luxury hotel The Dilly in London and plans to invest an additional £60 million (approximately NIS 248 million) in its renovation.
The investment comes on top of the £90 million (approximately NIS 370 million) that the company invested in 2022 to acquire the sublease rights to the property. Once completed, the total investment in the hotel is expected to reach approximately £220 million (around NIS 900 million).
In October 2022, Fattal, controlled by David Fattal, announced the acquisition of the hotel's sublease rights in a £90 million deal and said it planned to invest an additional £85 million in renovations. The transaction was carried out through a partnership established that year with institutional investors to acquire and renovate hotels across Europe that would be managed by Fattal.
The partnership raised investment commitments of €381 million, including €100 million from Menora and Harel, alongside additional commitments from Meitav, Leumi Partners, Shlomo Insurance, Hachshara and Analyst. Fattal itself committed to invest €100 million in the partnership.
The London hotel is one of 19 hotels acquired by the partnership across several European countries by the end of March this year. Since then, Fattal has launched two additional investment partnerships: one in 2024 that raised €542 million and another launched this year, which has so far secured €518 million in commitments.
By acquiring the master lease rights after previously holding the sublease rights, Fattal Mobility, the partnership through which the investment was made, will gain greater control over the renovation process and improve its ability to generate future cash flow from the property.
The seller is British investment fund The Crown Estate, which owns a large portfolio of properties in London. Last week, the fund completed the acquisition of the lease rights to the property housing the hotel, along with adjacent retail and office buildings, in a transaction valued at approximately £120 million.
In addition to the lease rights sold to Fattal, The Crown Estate holds a partnership with Norway's sovereign wealth fund in the land on which the property is located.
Bank Hapoalim is leading the financing for Fattal's acquisition and renovation project, providing a total credit facility of £170 million. Mizrahi Tefahot Bank is participating in the financing with £50 million.
The Dilly is located in the heart of London's West End, between Piccadilly and Regent Street, and includes 283 rooms. Fattal began the renovation process in 2022 and expects the project to be completed in 2028. While the company initially estimated the renovation cost at £85 million, the current estimate has been reduced to £60 million.
The Dilly is one of 61 hotels operated by Fattal in the UK and Ireland as of the end of March, making the region the company's second-largest operating segment after continental Europe, primarily Germany.
Fattal's UK and Ireland operations generated revenue of NIS 2.35 billion in 2025, compared with NIS 3.1 billion in Europe and NIS 1.98 billion in Israel. Revenue from the region declined 3% compared with 2024.
EBITDAR, a key profitability measure in the hotel industry that reflects operating profit before depreciation, amortization, other expenses and rental costs, fell more sharply, declining 10% to NIS 780 million, mainly due to higher employee salary expenses.
The company recently expanded into the U.S. market for the first time, acquiring its first hotel in Manhattan.
Fattal is the largest Israeli hotel company traded on the Tel Aviv Stock Exchange, both by market capitalization and by the number and geographic spread of hotels it operates. Other publicly traded Israeli hotel groups include Isrotel, Dan Hotels and Israel Canada Hotels.
Unlike Fattal, Isrotel and Dan Hotels focus primarily on the Israeli market, while Israel Canada Hotels, which acquired the Brown Hotels chain last year, also has significant international operations.
Despite rising 14% over the past year, Fattal's share price has underperformed the Tel Aviv 125 Index, which gained 33% during the same period. The company has faced pressure from Israel's security situation, hotel closures during the war with Iran and weakness in inbound tourism.
