Starwood Capital agrees to sell portfolio of UK hotels
Starwood Capital Group has announced that a controlled affiliate has agreed to sell an £830m ($1.1b) portfolio of 14 UK hotels that form part of The Principal Hotel Company to Foncière des Régions through its subsidiary dedicated to hotel real estate, Foncière des Murs.
Set to be completed in June 2018, the transaction consists of 14 full-service hotels comprised of 2,638 keys and split across two distinct landmark brands, Principal (12 hotels) and De Vere (2 hotels). The properties occupy flagship locations in high-growth cities across the UK, including London, Manchester, Edinburgh, Glasgow, Oxford, York and Leeds, with The Principal London and The Principal Manchester included in the portfolio.
“This landmark transaction represents a major milestone in our remarkable journey with The Principal Hotel Company,” comments Cody Bradshaw, Managing Director and Head of European Hotels for Starwood Capital Group. “Five years ago, we embarked on an investment strategy aimed at consolidating more than 50 hotels across four different UK hotel companies to form a leading platform. With this sale to Foncière des Régions, we will have realised 35 asset disposals in total since our acquisition. As long-term institutional investors, Foncière des Régions are extraordinary custodians of real estate and we could not be more thrilled to pass them this iconic collection of assets.”
The Principal Hotel Company includes many of the properties that Starwood acquired through the purchase of Principal Hayley in 2013, Four Pillars and De Vere in 2014, and the Townhouse Collection in 2015, and the subsequent combination of the four portfolios. Starwood has invested significant capital into the portfolio in recent years to reinvigorate the properties and re-launch the Principal and De Vere brands to the market. This included the openings of The Principal Edinburgh Charlotte Square, The Principal York, The Principal Manchester, The Principal Edinburgh George Street and the flagship of the brand, The Principal London, which will complete its latest restorations in summer 2018. The De Vere brand recently celebrated its official re-launch following substantial investment across the estate, which saw its mansion house hotels extensively renovated to hail their British heritage and natural landscapes. Following the rollout of its new Smart Space meeting and events product, together with nearly a dozen new restaurants and bars, De Vere has cemented its position as a leading independent conference hotel group in the UK.
Eastdil Secured and UBS served as advisors on the transaction.
