The hotel investment sector in the U.K. and Europe is in a delicate position.
Brexit is helping U.K. tourist numbers because of the cheap pound. But the U.K. economy is stuttering, which affects business travel.
In Europe, there is a marked difference between the economies and hotel investment prospects of countries like Spain, Germany and the Nordics on the plus side, and Italy on the down side, with France in wait-and-see mode.
Here are the hotel deals to watch to see how investors feel about the sector.
£600M sale of Vincent Tchenguiz’s Hilton portfolio
:quality(75)){kind=logo}
Iranian entrepreneur Tchenguiz appointed Savills and JLL on 4 July to sell a portfolio of 10 Hilton hotels for around £600M. The hotels could be sold as a portfolio or separately, with the £300M Kensington Hilton the flagship. A sale of the whole portfolio would show investors are willing to buy smaller hotels when they are packaged in with a prime asset. EuroProperty reported in 2015 that hedge funds had bought into the £250M of debt secured against the portfolio.
Lone Star’s £1B Aramis exit
:quality(75))
Lone Star has appointed Credit Suisse and Eastdil Secured to advise on options for a portfolio of 42 U.K. hotels that are part of its Amaris Hospitality platform, which owns 89 hotels across the U.K. The portfolio could fetch £1B.
The sale will be significant as it will be a barometer of interest for mid-market regional U.K. hotels. But the hospitality sector had been hoping Lone Star would undertake an initial public offering of the entire Aramis business and create the U.K.’s first hotel REIT. That might still happen, but now looks unlikely, with a sale the more likely option.
Aprirose’s £500M QHotels purchase
:quality(75))
Another bellwether for the U.K. mid-market sector, which is dependent on business travel, is the sale of QHotels by private equity firm Bain Capital. Fund manager Aprirose is reported to be under offer to buy the 26-hotel portfolio for £500M. But the sale has been an on-off affair that has taken almost two years, with a price tag of £650M originally mooted. Private equity firms such as Starwood, Apollo and Cerberus have similar portfolios to be sold over the next few years, and this sale will be a crucial data point for them.
Grosvenor House finally sells
One of the most complex and longest-running sagas in the sector should be drawing to a close soon. Indian firm Sahara has been looking to sell the Grosvenor House in London and New York’s Plaza and Dreams hotels for more than two years, as founder Subrata Roy, who is being pursued by India’s securities regulator, needs to sell to pay bail fees and other legal costs.
New York firm Ashkenazy Acuistion Corp. has teamed up with former Qatari Prime Minister Hamad bin Jassim to buy the hotels for $1.2B. The Grosvenor House will fetch £575M, and is well-known to everyone in London property as the city’s largest ballroom and events venue.
Accor’s €6.6B European megadeal
:quality(75))
Accor is in the process of spinning off its HotelInvest division, and according to reports has found a buyer for an 80% stake in the business, which owns and leases 1,180 hotels and is valued at €6.6B.
A consortium comprising Saudia Arabia’s Public Investment Fund, GIC, Amundi and Colony NorthStar are buying the stake, according to Estates Gazette. It would be the Saudi sovereign wealth fund’s first real estate deal as the country looks to start to diversify its economy beyond oil.
For more on the hotel investment market, join Bisnow at our Big Hotel Reception on 14 July.
)
)
)
)
)
)
)
)
)
)
)
)