KKR and The Baupost Group have completed their joint acquisition of a portfolio of 33 Marriott International hotels across the UK from the Abu Dhabi Investment Authority (ADIA).
Amante Capital, KKR’s European hospitality platform, will be managing partner for the joint venture and the properties will continue as premium Marriott-branded hotels.
The portfolio comprises 33 full-service properties branded as Marriott and Delta by Marriott in London and regional cities including Edinburgh, Glasgow, Leeds and Liverpool. The joint venture said the 6,500-key portfolio includes refurbishments and a mix of amenities catering to business and leisure guests, ranging from conference and event venues to golf and recreation.
The price paid has not been disclosed but is understood to be around £900 million. Hotels in the transaction include the 311-room London Marriott Hotel Regent’s Park and the 206-room London Marriott Hotel County Hall. The latter is the former home of the Greater London Council and across the River Thames from the Houses of Parliament.
In May, CoStar News reported the deal’s portfolio was the remnants of a larger portfolio that ADIA bought from the Royal Bank of Scotland. ADIA paid £640 million for 43 hotels in 2013. RBS sold the assets after seizing them in June 2011 from Delek Global Real Estate, Quinlan Private and Igal Ahouvi, which had paid £1.2 billion for the portfolio in 2007.
“Our purchase of this impressive portfolio reflects our conviction in the UK and the opportunity we see to invest behind strong fundamentals and long-term growth in the European hospitality sector,” said Mai-Lan de Marcilly, managing director and head of transactions France and Hotels at KKR in a statement. “With Amante Capital we have built the capabilities to be a scaled acquirer and operator of premium hotels across Europe. This is our second investment with Marriott International in Europe and expands our global relationship as well as making us the largest owner of premium segment Marriott International hotels in EMEA.”
KKR has been a long-term investor in UK real estate, having transacted over US$3.5 billion since 2016 across hospitality, residential, student housing and logistics properties. It is making the investment primarily through its value-add and opportunistic European real estate strategy.
DLA Piper, Ropes & Gray and Simpson Thacher Bartlett served as legal advise to the KKR and Baupost joint venture. KKR Capital Markets and Eastdil Secured arranged financing for the transaction. Hamilton Pyramid served as asset manager, Eastdil Secured as adviser and Burges Salmon as legal counsel to ADIA.
The Baupost Group is a Boston-based investment manager.