Transaction / Assets Seller Buyer € MM
Meliá & Starwood Sell 4 Hotels To London & Regional For €230M
10 July 2017 – Expansión
The Meliá Hotel Group is rotating its asset portfolio. Starmel, the joint venture that the Mallorca-based hotel chain controlled by the Escarrer family constituted with Starwood Capital in 2015, has sold four hotels to London & Regional in an operation worth €230 million, according to market sources.
The hotels in question are the Sol Príncipe de Málaga, Sol Lanzarote, Sol House Ibiza and Sol Palmanova in Mallorca. These establishments, which have been renovated recently, contain more than 2,000 rooms between them and will continue to be managed by Meliá following the operation.
This is not the first time that London & Regional and Meliá have crossed paths. In fact, the company owned by Ian Livingstone, one of the greatest real estate entrepreneurs in the United Kingdom, and the Mallorca-based hotel chain have been partners since 2013, when London & Regional purchased 50% of a hotel that Meliá was preparing in Ibiza. That operation opened the doors to the Spanish market for Livingstone.
Meanwhile, the alliance between Meliá and Starwood Capital dates back to 2015, when the hotel group sold seven establishments in the Balearic Islands, the Canary Islands and Andalucía, worth €176 million, to Starmel. The fund controls an 80% stake in the joint venture, whilst Meliá, which recorded profits of €35 million from that operation, owns the remaining 20%. The partners planned to allocate €30 million to the renovation and repositioning of those hotels, which Meliá will continue to manage for the next 15 years.
In parallel, Starmel is continuing to look for opportunities to acquire new assets, with the focus on holiday resorts in the Mediterranean area. Hotels have become one of the preferred assets for investors.
According to data from the consultancy firm CBRE, investment in hotels exceeded €2,000 million during the first half of this year, which represents an increase of 170% compared to the same period in 2016. During this period, operations involving one hundred establishments have been closed, affecting 14,000 rooms in the Spanish market. In this case, CBRE has advised Starmel in the operation. “The assets are located in key tourist areas. Together with those destinations, Madrid and Barcelona are continuing to attract international investors, which reinforces the strength of the Spanish hotel market as an investment destination for the international investment community”, said Miguel Casas, Director of CBRE Hotels España.
The share price of Meliá Hotels International fell by 0.62% on the stock market on Thursday (following the announcement) to €12.88. The hotel chain, which has a market capitalisation of €2,959 million, has seen its share price rise by 16.25% so far this year.
For the year as a whole, Bloomberg’s analysts forecast that Meliá’s revenues will rise by 6.75% to €1,927 million and the net profit will increase by 12.45% to €116.5 million, according to the experts.
Original story: Expansión
Translation: Carmel Drake