MCAP Global Finance, an affiliate of New York-based investment manager Marathon Asset Management, has bought a 17-asset UK hotel portfolio from Cerberus Capital Management for £180m.
The portfolio consists of 17 branded, full-service hotels located in key regional markets across the UK including Leeds, Leicester, Reading and Southampton and comprises a total of 2,374 bedrooms across 15 Holiday Inns and two Crowne Plazas. The sale price represents £75,000 per key, sources said.
New York-based Cerberus Capital Management acquired the portfolio, which then consisted of 18 Holiday Inn hotels with 2,443 rooms, from a joint venture between Lehman Brothers Real Estate, Canadian property company Realstar and Singapore-based investor GIC Real Estate in March 2015 in the wake of the global financial crisis for £225m, or £92,000 per key.
“We are very pleased to have advised Marathon on their purchase of this high quality and well-positioned portfolio," Joe Green, senior director at CBRE, said. "``This transaction reflects investors’ confidence in the recovery of the hospitality market.”
CBRE advised Marathon and Eastdil Secured advised Cerberus Capital Management on the deal. A spokeswoman for CBRE declined to comment on the purchase price. A spokesperson for Eastdil wasn’t immediately available for comment.
The acquisition follows Marathon’s sale of a portfolio of 17 IHG and Hilton branded hotel assets at the end of 2019 for a reported £450m. The portfolio was sold by CBRE to DTGO Corporation, a new market entrant from Thailand.
Following the outbreak of the global pandemic, UK hotel investment plummeted by 70% for the full year 2020, with total transaction volume exceeding just over £1.8bn recorded, of which 81% occurred in the first quarter, before the full impact of disruption to the travel industry to be caused by COVID-19 became clear, according to data from Knight Frank. London saw a decline of 49%, with the sale of The Ritz to Qatari tycoon Abdulhadi Mana Al-Hajri contributing £750m to London’s total investment volume of £1.4bn, Knight Frank data shows.