In a sharp pivot shaped by regulatory headwinds, PPHE Hotel Group Ltd. said Wednesday it has agreed to sell a Manhattan development site for approximately $33.5 million, shelving long-held plans to build its first U.S. hotel and condominium project.
The site, located near Hudson Yards, will be sold through a subsidiary to an unnamed U.S. property developer. The transaction marks a strategic retreat from a project first envisioned when PPHE acquired the property in 2019.
Regulatory Shifts Reshape Strategy
PPHE, an international hospitality group listed on the FTSE 250 Index of the London Stock Exchange, said sweeping changes to New York’s hotel development rules ultimately made the project unworkable.
In 2024, the New York City Council proposed the Safe Hotels Act, ushering in a more stringent regulatory framework for hotel construction and operations. The measure, signed into law later that year, requires developers to secure a special permit from the City Planning Commission through a complex review process before building a hotel.
The law also mandates that every hotel obtain a city license, renewed every two years, to operate. Properties with more than 100 rooms must directly employ essential staff, eliminating subcontracting practices entirely — changes that increase operating costs and complicate traditional hospitality business models.
Against that backdrop, PPHE concluded that a hotel project at the site was no longer financially viable.
