There has been a steady stream of major hotel transactions in Europe across the first six months of 2024, even if the volume of deals has not been as high as prior years.
Throughout the first half of the year, notable hotel deals have spanned small to midsize portfolio transactions, single-property deals in urban or resort destinations and even the acquisition of an iconic London landmark that is to be converted into a hotel.
There are factors at play slowing the pace of hotel deal-making.
In a European hospitality whitepaper issued April 9, business consultancy Savills said investment yields have decreased according to its research of leased, management and franchised hotels across 21 European cities over the six months to the first quarter of 2024.
“On average, yields softened by 17 basis points on [third quarter] 2023 levels. As a result, prime headline yields on a median basis average 7% based on a management contract (international brand), 6.25% for franchise … and 5% for leased assets.”
The volume of hotel transactions could increase in the second half of the year if inflation pressures cool and interest rate cuts finally happen.
“With expectations that the current base rate cycle has peaked, [Savills] expects prime headline yields to have largely stabilized, and we expect yields will start to come back in late 2024, albeit this will be dictated by a reduction in base rates, which is expected in the latter part of 2024,” the report added.
Major elections are happening in the United Kingdom in early June and in the U.S. in early November, making investors reticent to deploy capital. High interest rates are expected to continue to offset rising operational costs and forestall any distress that would lead to owners selling their hotels at discounts.
Below is a roundup of the major hotel deals — portfolios and mega-hotels — in Europe during the first six months of this year. At publication time, not all the deals listed had closed.
Gruppo Statuto Acquires Mandarin Oriental, Paris
Deal announced Jan. 3
Rome-based owner Gruppo Statuto bought the 135-room Mandarin Oriental, Paris, for €205 million ($221 million), or more than €1.5 million per key.
Mandarin Oriental Hotel Group has a 50-year management agreement of the hotel, which opened in 2011, and it remains as the property's operator. The company said it is planning a €50 million renovation on the property.
Starwood Capital Group Acquires 10 London Radisson Blu Hotels from Edwardian
Deal announced Jan. 12
American private-equity firm Starwood Capital Group acquired 10 London hotels from Edwardian Hotels, one of London’s biggest private hotel owners. No price tag was announced but all the hotels are branded Radisson Blu and located in central London, with the exception of one at Heathrow Airport.
The deal means that Starwood Capital Group now has almost 10,000 rooms in 47 hotels in Europe. In a release on the deal, Starwood Capital Group added that Edwardian will continue to manage the 10 Radisson Blu hotels on a “transitional basis while [we plan] future investment into the hotels.”
Deka Immobilien Acquired London’s Ruby Zoe For €62 Million
Deal announced Feb. 12
German real estate management firm Deka Immobilien bought the 173-room Ruby Zoe Hotel & Bar, which opened in London’s Notting Hill district in June 2023, for €62 million ($67 million), or €358,381 per key.
The seller is Frogmore Real Estate Partners. The hotel now is part of the Deka-ImmobilienMetropolen fund and remains under operation by Ruby Hospitality under a long lease.
MCR Hotels Acquired London BT Tower Skyscraper
Deal announced Feb. 21
In February, U.S. hotel owner-operator MCR Hotels paid £275 million ($351 million) for the BT Tower in London, the West End’s tallest building and former headquarters of the Post Office. MCR said it intends to turn the building into a hotel, although no details have been given.
Travelodge Completes Acquisition of 66 Hotels for £210 Million
Deal completed Feb. 29
U.K. economy hotel firm Travelodge completed the acquisition of 66 hotels from London-based real estate investment trust LXi REIT, Travelodge's largest landlord, for £210 million.
LXi said of the deal that the “acquisition price was in line with the latest book value. Most of the sale proceeds will be used to pay down debt, reducing group loan-to-value to 34%, and Travelodge’s proportion of group rent will reduce to 11%.”
Castello SGR Acquires Poltu Quatu Resort For €70 Million
Deal announced March 5
Publicly listed asset-management firm ANIMA Group, via its division Castello SGR, acquired the Poltu Quatu resort, a mixed-use property on the Italian island of Sardinia. The €70 million deal with family office Pulcini Group included a 139-room hotel.
The buyer said it will partner with Marriott International brand W Hotels to operate the property.
Slovakia’s BHP Acquires 50% of CPI Hotels Portfolio
Deal announced March 12
Bratislava, Slovakia-based htoel owner-operator Best Hotel Properties signed a joint-venture agreement with Luxembourg-based CPI Property Group and assumed ownership of 50% of an eight-hotel portfolio in the Czech Republic managed by CPI subsidiary CPI Hotels.
The deal price, which included 50% of the operating entity, CPI Hotels, was valued at €173 million, putting a total value on the portfolio of €347 million. CPI Property Group said the sale was in line with its corporate strategy of disposals; CPI is targeting a disposal pipeline of €2 billion over the next 21 months.
Proprium Sells 35% Motel One Hotel Stake for €1.25 Billion
Deal announced on April 9
London-based private equity firm Proprium Capital Partners sold its 35% stake in Munich-based Motel One Group to the firm's majority partner One Hotels & Resorts GmbH for €1.25 billion ($1.36 billion).
The deal ends a 17-year partnership between the two firms. Proprium bought the 35% stake in 2007 for €65 million.
Ares Acquires 21-Hotel, £400 Million Landsec Portfolio
Deal announced May 8
Los Angeles-based investment firm Ares Management Corp., with funds from Ares Real Estate, acquired all 21 hotels and the operating platform of London-based Landsec for £400 million ($511 million).
Ares said £350 million of the acquisition price already has been paid to Landsec, with the remainder, with 6% interest, payable within 24 months of the initial announcement.
Kennedy Wilson Turns Near $100 Million Profit on Dublin Shelbourne Sale
Deal announced May 9
Beverly Hills-based Kennedy Wilson Holdings sold the 265-room Shelbourne Dublin Hotel for $99.1 million to Archer Hotel Capital, according to papers filed with the US Securities & Exchange Commission.
The hotel is part of Marriott International’s Autograph Collection. Archer Hotel Capital also owns the 192-room Conrad Dublin.
Singapore’s CDL Acquires Hilton Paris Opéra for €240 Million
Deal announced May 14
In mid-May, Singapore-based Copthorne Hotel Holdings, a division of City Developments Ltd., acquired the 268-room Hilton Paris Opéra for €240 million ($259 million), or €895,522 per room.
The seller was private-equity firm Blackstone via its Blackstone Real Estate Partners Europe IV fund, which bought the hotel in 2014, when it was unbranded.
Swiss Life and Amundi Acquire 23-Hotel Eurazeo Portfolio
Deal announced June 7
A consortium formed by owners Swiss Life and Amundi and operator B&B Hotels has acquired a 23-hotel portfolio from publicly listed Eurazeo Real Estate for a price tag of approximately $35 million ($38 million). The French hotels are part of Eurazeo division Grape Hospitality, of which it owns 70%.
Fattal Hotel Group Acquires 12-Hotel Zien Portfolio
Deal announced June 7
Israeli hotel firm Fattal Hotel Group acquired the entire 1,522-room, 12-hotel portfolio of Dutch hotel brand Zien Group from owners KSL Capital Partners and Garden Capital Group, which, in turn, acquired the properties in 2021. All 12 hotels are located in The Netherlands.
The hotels acquired will be folded into Fattal’s Leonardo hotel brand, which now consists of more than 200 hotels in Europe, including 62 in Germany and 49 in the U.K.
Azora Acquires Four Brussels Buildings, Including Two Hotels
Deal announced June 10
Spain-based real estate investment trust Azora acquired four adjacent buildings in Brussels, two of which currently operate as hotels, for an undisclosed price. The two hotels, both located on the pedestrian Rue du Berger, are the 51-room Hotel Le Berger and the 34-room Jardin Secret Hotel.
The April 2024 price for the portfolio of properties was £15.4 million, according to CoStar data, though the other two buildings included in Azora's latest acquisition are not part of that portfolio price.
The Madrid-based Azora said it intends to combine the four properties to open a hotel-hostel with 99 hotel rooms and 130 hostel beds. The operator will be Azora’s in-house division Latroupe.
Prima Asset Management Acquires London's Victoria Garden Hotel
Deal announced June 17
Singapore-based Prima Asset Management acquired the 68-room Victoria Garden Hotel at 100-102 Westbourne Terrace in London's Paddington district for an undisclosed price. Prima plans to renovate the hotel and add a further 12 or so guestrooms. The company said that would give the asset a value of more than $70 million and recast the property as a boutique hotel.
London-based Capilon Group will develop and operate the freehold property, which is an 1840 building that was originally two grand homes.