UPDATED: JLL Forgoes ‘Millions’ In Fees By Severing Ties With Brunei-Owned Hotel Group
JLL has pulled out of a contract to manage the Brunei Investment Authority’s £1.7B ($2.2B) global hotel portfolio due to new laws rolled out by Brunei’s rulers that could see homosexuals stoned to death.
And other real estate advisory firms are reportedly wary about working for Brunei on a major Mayfair redevelopment project because of uneasiness about the laws.
The move seems to have worked: After worldwide protests and a boycott of Brunei-owned hotels, the country declared a moratorium on the laws, meaning they would not be enforced in practice, the Sultan of Brunei said in a speech on 5 May. Brunei has operated under moratoriums such as this for decades — the Guardian reports it has not executed anyone since the 1990s, though multiple crimes (including murder and drug trafficking) have been punishable by the death penalty according to the law.
According to Property Week, JLL’s hotels and hospitality division unilaterally decided to withdraw from the contract to manage the Dorchester Collection of hotels as a result of concerns expressed by other clients. Property Week quoted a source as saying the fee income from managing the portfolio was in “the low millions [of pounds]”.
The portfolio comprises nine hotels around the world that are owned by the Brunei Investment Authority, which is controlled by the Sultan of Brunei and his family.
Actor George Clooney wrote an article for website Deadline highlighting new laws that were introduced in April which include the possibility of the death penalty for homosexuals. He called for a boycott of Dorchester Collection hotels, which include the five-star Dorchester in London as well as 45 Park Lane in London and the Beverly Hills Hotel and Hotel Bel-Air in Los Angeles. Other celebrities, including Ellen DeGeneres, Elton John and Richard Branson, have publicly said they will boycott the properties.
Businesses, including some property firms, have moved corporate events from the Dorchester to other venues in protest. Events business Movers and Shakers was the first to pull out of hosting an event at the Dorchester, and Knight Frank and Shaftesbury also pulled their business.
The Brunei Investment Authority owns two other significant property assets in London — One Embankment Place, leased to PwC, and the multi-let Lansdowne House on Berkeley Square. At this latter property, major real estate brokers were also weighing up whether to associate themselves with Brunei.
Bisnow revealed in January that the 186K SF Lansdowne House had been granted an exemption from listing, opening up the possibility of a lucrative redevelopment of the building, which occupies one of the most expensive squares in London. The building could be worth £500M if redeveloped.
According to Bloomberg, brokers were asked to pitch for the mandate to advise on the redevelopment, but have either declined, or sought clarification on the new laws. Firms invited to pitch include CBRE, Colliers International, Cushman & Wakefield and Knight Frank. An unnamed developer has been been appointed to oversee the redevelopment but may pull out, Bloomberg said.
UPDATED, MAY 5, 3:28 P.M. ET: Brunei announced a moratorium on the laws that made homosexuality punishable by death, keeping them on the books but saying they would not be enforced. The story has been updated.