The largest hotel portfolio on the market is up for sale: 240 million for nine Silken hotels | Companies

A new large enterprise is being formed in the hotel sector. Six years after they acquired nine hotels owned by construction group Urvasco, with full payment suspension in 2018 and managed by the Silken chain, UK fund Pygmalion and property manager CBRE Investment Management (CBRE IM) have struck a deal to sell the portfolio worth 240 million euro, making it the most important trade to date. For this process, the two partners selected consulting firm CBRE as their advisory firm.

This corporate move comes after 2023, marked by the purchase of two giant hotel portfolios in Spain: seventeen hotels acquired by the Abu Dhabi sovereign wealth fund for €600 million, and the purchase of 35% of the HIP (Blackstone) portfolio by the Singapore sovereign wealth fund. wealth fund (GIC) in a deal worth more than €1 billion.

The deal that Pygmalion Capital Advisers and CBRE GIP want to close includes nine Silken brand hotels acquired by the two partners in 2018 (Al Andalus Palace in Seville, Amara Plaza in San Sebastian, Indautxu in Bilbao, Juan de Austria in Valladolid, Puerta Madrid ). de Madrid, Alfonso Five days.

Pygmalion is leaving from sale, in principle, two hotels in its portfolio located in Italy. In April 2021, the British fund unveiled the purchase of two hotels of the American Hilton chain in Florence, with a total of 333 rooms. In this case, he acquired them through an opportunistic fund to acquire the assets of companies affected by the Covid-19 pandemic.

However, it is unclear whether the change in ownership will mean a change in hotel operator. Sources close to the hotel company confirm that Silken has a 15-year lease, which can be extended for a further five years, and that in the six years since the change of ownership, the assets have undergone significant revaluation, while turnover has increased significantly. A good proof of this is that the company repaid early in July the loan of 18 million that it received through the Fund for the Recapitalization of Companies Affected by Covid-19 (Fonrec), thanks to a strong increase in turnover (120 million euros in 2023, up 21% more than in 2019). This hotel company operates around 40 hotels in Spain.

In any case, the process of selling this portfolio is a clear sign that this type of tourism asset continues to remain in the spotlight after several years of record investment levels. For now, investors, especially foreigners, have not lost their appetite for these properties after 2023, when hotel purchases and sales in Spain surged to €4.160 million, the second best record in history after 2018. , with 4.8 billion, according to Cushman & Wakefield. In turn, in the first half of 2024, transactions with 56 hotels worth 1.627 million were concluded in Spain, representing an increase of 3% compared to the same figure in 2023, the report said. Market rhythm from the same real estate consulting company.

Pygmalion is a little-known fund in Spain. It was created in 2017 by Christophe Beauvilen, a former Goldman Sachs executive, with the intention of using the two funds he had raised so far to make opportunistic investments in hotels.

Also currently on sale in the investment market is the Sol Falcó Meliá hotel in Menorca, priced between $40 million and $50 million, which is the basis of Bankinter-controlled listed company Atom. The owner of the Miguel Angel, Iraqi-born Briton Nadmi Auchi, was also considering selling the property for 200 million and has just refinanced the five-star hotel located in Madrid with the help of Ben Oldman’s fund.

Purchase of CBRE IM portfolio in joint venture With Pygmalion, it marked the New York real estate giant’s entry into Spain’s tourism sector. This fund, led by Antonio Simontalero and Antonio Roncero, is one of the largest real estate investors in the country.

Currently, CBRE IM is also one of the largest landlords of rental housing through its Nestar platform in an alliance with the Spanish management company Azora with an investment of 800 million in 2018. In addition, it controls SOCIMI (a listed investment company in the real estate market) Healthcare facilities, student accommodation, with briefcase more than 900 million. His presence as the owner of large logistics warehouses is also common. The company recently acquired a warehouse in Pinto and two other warehouses in Camarma de Esteruelas (Madrid) and Illescas (Toledo). Last year, the company also acquired rental homes built by developer Culmia.

CBRE IM has also developed office projects, such as the building by the architect Norman Foster, which currently houses a branch of CaixaBank (former Barclays headquarters) in the Plaza de Colon in Madrid, and which was sold in 2020 to the GPF fund for 100 million. Likewise, together with its partners AXA and Greystar, two years ago it transferred the largest portfolio of residences in Spain, Resa, in a transaction valued at more than 800 million.

Globally, CBRE IM manages $144 billion (€132.42 billion at current exchange rates) in real estate assets and operates in 20 countries.