The decline of the Portland Hotel, Hull’s first four-star AA hotel

Today, the derelict former hotel in Portland casts a long shadow over Paragon Street, Hull, with an equally dark cloud hanging over its future. Its uncertain fate is tied to a tangled web of businesses, foreign buy-to-let investors and ongoing lawsuits.

Pakistan Investment

At the center of the web is a flamboyant property developer promoting over £1billion property investment plans in Pakistan.

However, Khalid Bhatti’s vision of creating complexes featuring luxury apartments, designer shopping malls and beauty spas contrasts sharply with the current state of the empty six-story building in the city center.

Interior damage to the Portland Hotel

According to a nearby shop owner, there is also extensive water damage inside the property.

The business owner told Yorkshire Bylines:

“There was water coming into my store [underneath the hotel]. At the time there were builders working there and they took me up to the top floor. I couldn’t believe what I saw. There were big holes in the roof [and] they were only covered with plastic bags.

Internal flooding after recent heavy rain is also believed to be behind the temporary closure of the adjacent Cooplands cafe and bakery in Paragon Street, although it is unclear whether the damage is linked to the hotel .

The rebranding of The Portland Hotel

It’s all a far cry from the late 1960s, when it first opened as The Center Hotel. At the time, it was the first hotel in downtown Hull since the end of the Second World War.

Later renamed The Paragon Hotel, it was a popular spot in its heyday with over 100 rooms, a large restaurant and dining room, conference rooms, and its own downstairs bar. The development also included new store units at Carr Lane and Paragon Street.

The venue finally closed in 2012 as The Portland Hotel after administrators were appointed to take over its parent company The Lincoln Group.

Transformation into student rooms

In June 2013, planning permission was obtained from Hull City Council to convert the hotel into a 126-bed student accommodation complex by a company called Crown Place Hull Ltd, run by Rafik Patel.

A month later the empty property was purchased for £600,000 by Grif Student Grounds Rents Ltd. The property is believed to have been briefly used to house students with en-suite bedrooms, priced at £99-£135 per week.

Khalid Bhatti’s investment plans to ‘build the future’

Then, in August 2018, Grif Student Ground Rents Limited granted a 999-year lease on the property to a new company, Daniel Johns Hull Limited, owned and chaired by Bhatti, in a £400,000 deal.

Accounts filed with Companies House show at various times that the company’s name has been changed six times, while Bhatti himself is currently listed as having held 57 different directorships. Some are still active but most companies are either dissolved or liquidated.

Amidst all this excitement, the old hotel remained closed.

Shortly before renting the Hull property, Bhatti was busy elsewhere in Pakistan’s capital Islamabad, launching his vision for luxury property investing in a lavish ceremony. He laid out his plans to build a complex aimed at attracting foreign investors who could use their apartments for vacations.

In front of an audience of models, celebrities and TV stars, he said, “We’re not just building properties, we’re building futures.

Unregulated Collective Investment Schemes (OPC)

However, investors in some of the Daniel Johns Group’s UK projects have recently shared their unfortunate experiences with the group. The Financial Conduct Authority has also warned that certain investment schemes – known as unregulated collective investment schemes (UCIs) are being illegally promoted and sold to members of the public, who risk losing money.

Our investigation confirmed that such transactions could well have occurred on rooms of the old hotel.

Official Land Registry documents reveal that a lawsuit was filed in Hull County Court which resulted in the granting of acquisition orders relating to 33 named investors, most of whom are believed to be from Hong Kong.

Neil Stockdale, partner in the top 100 UK law firms Hugh Jamesis looking at a potential UCITS scheme where investors have bought similar units in developments in London and Liverpool from the Daniel Jones Group.

In one case, a Hong Kong-based investor paid £62,000 for a unit in an office building in Liverpool that has yet to be built. He did not receive a single penny on what was billed as a guaranteed rental return.

Daniel Johns Group’s illegal UCIs

Speaking of the Liverpool and London schemes, Stockdale said: “Our initial investigations lead us to believe that all of these clients were illegally sold an OPC and that the lawyers who acted for them were negligent in various ways. “

He said the situation surrounding the old Portland Hotel in Hull was unclear.

“We have reviewed the title documents relating to this matter and it appears that the freehold owner has granted a long lease to Daniel Johns Hull Limited who then granted a sub-lease to DJ Suites Hull Ltd.”

According to Daily Dimsum, the Daniel Johns Group’s sales office in the city recently closed. Hong Kong’s Estate Agents Authority is currently investigating investor complaints about at least 20 blocked development projects in the UK.

The fate of the Portland Hotel

Attempts to inquire directly with the Daniel Johns group about the fate of the old hotel were unsuccessful. However, the property’s ultimate owners, the Ground Rents Income Fund, responded with a comment.

A spokesperson said: ‘Daniel Johns, as long-term tenant with a remaining term of 996 years, is responsible for the current use of the property as well as any decisions regarding its future use.

“We are, however, still in contact with the tenant to try to understand the plans for the property and are broadly supportive of any regeneration initiative, although no formal proposal has yet been presented to the owner.”

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Sandy A. Greer