Thai hotel investors and operators are continuing to acquire assets both in Europe and Southeast Asia, opening new markets for their existing brands.

Since Minor International's 2.3 billion euro ($2.74 billion) purchase of Spanish hotel firm NH Hotels in October 2018, more Thailand-based investors have emerged to make deals or form joint ventures.

This year, S Hotels & Resorts — a subsidiary of Singha Estate — bought the remaining 50% of 26 Mercure hotels with a total of 2,886 rooms in the U.K., from its joint venture partner, FICO Holdings United Kingdom, for 560 million Thai baht ($17.8 million).

The two partners bought the first 50% in November 2015, with S Hotels & Resorts also having an additional Mercure hotel and two Holiday Inn assets in the U.K. for a combined 3,115 hotel rooms.

Bill Barnett, founder and managing director at Phuket, Thailand-based hotel consultancy C9 Hotelworks, said he saw “the S Hotels deal as an opportunistic deal given the other owner FICO is extremely stressed financially."

S Hotels & Resorts’ CEO Dirk De Cuyper said the firm now has 39 hotels in total, including four in Thailand, three in The Maldives, two in Fiji and one in Mauritius.

He described S Hotels & Resorts as a “hospitality management and hotel investment company focusing on business expansion and investment in businesses or assets with high growth potential. Key markets for growth will be Thailand.”

“Outside of Thailand, we will be focusing short-term on Southeast Asia, such as Vietnam, Indonesia, and medium-term on leisure destinations in Europe and [the] Indian Ocean,” he said.

De Cuyper said his strategy also will see some European hotels leave his orbit. The company will sell some of its non-core assets in the portfolio and invest in its core assets in prime locations, such as Manchester and Edinburgh.

S Hotels & Resorts is also working with branded international lifestyle partners, such as Outrigger and Hard Rock Hotels.

Thai investors also have been busy in Thailand itself.

In October, KTB Securities, MFC Asset Management and Destination Capital signed a joint venture to launch DESCAP1 Private Equity Trust, targeting distress in Thailand. The fund will have an emphasis on the tourism destinations of Bangkok, Hua Hin, Pattaya and Phuket, which a news release stated “are viewed as [Thai] destinations expected to rebound the quickest after COVID-19.”

The fund, which its founders plan to raise 2.5 billion Thai baht ($79 million), will focus on freeholds of four-star assets with between 150 and 250 rooms.

The 2018 Minor International deal led to the company's 573 million euro ($640 million) deal with French real estate investment trust Covivio to operate eight hotels and 1,115 rooms from Milan-based investment firm Värde Partners. The focus there was to expand Minor’s upscale Anantara brand in Europe.

Recent investment in Europe from Thai firms also included a December 2019 deal by Bangkok-based DTGO. As the pandemic started, DTGO bought a 17-asset, 3,383-room portfolio of United Kingdom hotels managed by Valor Hospitality from U.S. private-equity fund Marathon Asset Management.

The 460 million pound ($632 million) deal — the company’s first move into Europe — included hotels under Hilton’s DoubleTree by Hilton and Hilton Garden Inn brands, Marriott International’s AC Hotel by Marriott brand and IHG Hotels & Resorts’ Crowne Plaza, Hotel Indigo and Holiday Inn brands. The hotels are located in 13 U.K. cities, including Birmingham, Glasgow, Liverpool and Manchester.

Barnett said what ties Thai investors together is that they are “looking to spread risk and also look at investment into groups that have multiple locations and assets, versus putting all their eggs into one basket.”

“Expect more of this, but for the most part, it is spreading risk and diversifying return profiles,” he added.

Narai Group, another Thai investor, has invested into a European-based fund, Barnett said. It also owns the 25hours Hotel Bikini Berlin in Germany.

“They are also investors into Australia’s Pro-Invest, so [the company is interested in] looking at attractive larger-scale, not single-asset investments,” Barnett said.

De Cuyper said investments will permit two of S Hotels & Resorts hotel brands — the upscale SAii, launched in 2019, and the “luxury midscale” Nābor — to grow, even though they're not readily known in Europe.

Dillip Rajakarier, group CEO of Minor International and CEO of Minor Hotels, said his firm’s expansion in Europe was “part of our diversification and to become a truly global player," adding that the conditions for investment are perfect.

“This also acts as a platform to grow our brands in Europe and also increase our visibility in Europe by getting guests from Asia, Middle East and Africa to use our brands in Europe,” he said. “The other reason was also the currency, the Thai baht, was strong and our funding rates are lower."