The year closed with a number of deals in Europe, with sales for Blackstone Group, acquisitions in Germany for PPHE and The Ascott and the promise of transactions to come with a fundraising at Pandox.
As the new year approaches, there is no sign of the transactions pace slowing, with demand from around the world.
At Blackstone Group, the company has sold the DoubleTree by Hilton hotel next to the Tower of London to the Bhatia family for over GBP300m, one of the largest single transactions of the year. The private equity group bought the hotel in 2011 when it was part of the Mint portfolio (previously branded under City Inn), picking up the nine-strong group for GBP610m.
The hotel was one of a trio of Doubletree-branded sites which Blackstone was marketing in Europe, with plans to raise up to EUR1bn. The group has already sold the DoubleTree by Hilton Dublin Burlington Road to Deka Immobilien, with the lease going to Dalata Hotel Group. The DoubleTree by Hilton Amsterdam Centraal Station now remains, being marketed through CBRE Hotels and Eastdil Secured for a rumoured EUR340m.
The site is the third London hotel for the Bhatia family, who also own the Hilton Paddington and Hilton Waldorf. It is believed that the family beat competition from London & Regional and Host Hotels & Resorts for the property.
Last year saw Marathon Asset Management buy five former Mint Hotels with around 1,200 rooms from Blackstone for GBP160m. The hotels are now branded Hilton Garden Inn in Birmingham, Bristol and Glasgow and DoubleTree by Hilton in Leeds and Manchester.
In London but looking outwards, PPHE Hotel Group’s Arenaturist has bought the freehold of its art’otels in Cologne and Berlin, for EUR54.5m. The company currently leases and manages both properties.
Boris Ivesha, president & CEO said that the company was “delighted with the acquisition of the freeholds of these two hotels in Cologne and Berlin which we have managed under our wholly owned art’otel brand for a number of years. The group’s portfolio in Germany consists of eight hotels and this latest acquisition highlights our commitment to our presence in gateway cities in Europe.”
At The Ascott, the company made its debut in Ireland with the EUR55.1m acquisition of the 136-unit Temple Bar Hotel.
Alfred Ong, Ascott’s managing director for Europe, said: “Ascott has built a strong presence in Europe as one of the region’s largest international serviced residence owner-operators. We look forward to bringing our signature hospitality to Ireland with a centrally located and quality accommodation in Dublin for our corporate and leisure guests.
“Acquiring an operating property in Dublin will give us a much faster time-to-market. The property has been achieving over 80% occupancy in the last few months and we are confident that we will be able to add value to this prime asset. There are already plans to rebrand the property at a later date.”
Also in Europe, Pandox has raised SEK1.01bn by issuing 7.5m B shares. The shares were bought by institutional investors including Eiendomsspar Sverige AB, Christian Sundt AB, AMF, and Swedbank Robur Fonder. Pandox expects to use the proceeds to grow its portfolio through further acquisitions. The issue effectively dilutes Pandox shareholdings by 4.8%.
The company has been on the acquisitions trail, last month acquiring seven hotel properties in Europe – four in Germany, two in Austria and one in the Netherlands – from Invesco Real Estate for EUR415m.
Like PPHE, the group has an eye on the popular German market, with the deal strengthening its market position in the country, with an additional three hotels in Frankfurt, Hamburg and Cologne, and one hotel in Munich, a new city for the group. The deal also establishes Pandox in Austria and the Netherlands with three hotels in Vienna, Salzburg and Amsterdam, which are all new countries and cities for the company. The properties are operated by NH Hotels, Rezidor Hotel Group and Grand City Hotels under long-term revenue-based lease agreements with, the group said, good rental guarantee levels. The portfolio has a yield of approximately 5.7%.
HA Perspective [by Katherine Doggrell]: As Nissen told attendees of the group’s Hotel Market Day last month that: “The final chapter is not written yet” for Pandox and the same could be said for the European transactions market, which has steamed ahead this year despite Brexit and the threat of further political shocks next year.
The Ascott made a point of pointing out that, post-Brexit, Dublin has stepped up efforts to woo multinational companies to site their EU-based operations in Ireland. As 2017 nears and the government in the UK starts to formulate its Brexit plan, access to Europe (and other businesses’ access to Europe) this may start to become a factor. Good news for current investors in the supply-starved Irish market.
Otherwise, despite the shocks in the US and Europe in 2016, it has been business and usual. Agents we have spoken to see the transactions market continuing to flourish into the new year, albeit single assets rather than portfolios. This is due to past appetites, not current caution – the portfolios have already been snapped up.