Hotel Analyst
Louvre Hotels Group portfolio and to support the growth of Baccarat into new geographies, with a focus on Asia, expanding its presence in the hotel and residential arena.”
Flagship for the Baccarat brand will be the Baccarat Hotel & Residences on 53rd Street, New York. The 50-storey block will have 114 rooms, and a further 61 residences ranging in size from one to five bedrooms. Sales of the residences will begin this March, with a 2014 completion planned. The second Baccarat will be opening in Rabat, Morocco while further locations are promised in the Middle East and Asia, including Dubai and Marrakesh. 1Hotels, which sets out its stall as “the first ground-up luxury eco-design and living hotel concept”, will launch with a Central Park hotel in New York and South Beach, Florida hotel and residences opening in early 2014; the latter will have 417 hotel rooms, and 167 residences with one to four bedrooms, and is being created with a major refit of an existing 1970s building. These will be followed by a second New York hotel, at Brooklyn Bridge, opening a year later. The first international location for 1Hotel will be in Marrakesh. “What was once just an idea will soon be a reality,” said Sternlicht. “With two revolutionary hotel brands entering the marketplace and five hotel openings in the next two years, we are confident that Baccarat and 1Hotels will place Starwood Capital Group at the very forefront of the dynamic hospitality industry.” Starwood originally planned to
sell a portfolio of nine of the Louvre luxury hotels to Middle Eastern buyer JJW Hotels & Resorts. But the deal fell apart in 2009 amid claim and counter claim relating
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to funding of the USD2.1bn deal. Since then, the hotels have been marketed on an individual basis, with earlier sales from the Louvre portfolio including the Lutetia, which Israeli investor Alrov paid EUR150m for in 2010; the Hotel de Crillon, sold for EUR250m to Saudi investors; and the Concorde Montparnasse, which was bought by hotelier Didier Ferre in 2011 for EUR87m.
HA Perspective: Starwood
Capital’s acquisition of Societe du Louvre and the champagne maker Groupe Taittinger for EUR2.1bn back in 2005 looks to be at last paying off. The hold period is no doubt longer than preferred and this will impact the returns but compared to some of the transactions struck in the years following it looks a smart deal. What the deal also highlights is the contradiction between being an opportunistic real estate player and an investor in a brand and operating company. As Starwood Capital seeks to build up its own luxury brands, it appears ironic that it is simultaneously selling out some of the most iconic hotels in Europe, handing rival Hyatt an important leg-up in its own ambitions.
Qataris swoop
on Berlin duo Qatari investor Al Faisal Holding has purchased two Berlin
hotels, in the latest
example of Qatari capital coming into European hotel real estate.
The deal saw Al Faisal buy the Grand Hyatt and Maritim hotels in the German city, through its hospitality subsidiary Al Rayyan
116 MARCH / APRIL 2013
WWW.SLEEPERMAGAZINE.COM
Tourism & Investment (ARTIC), for an undisclosed sum. The buys adds to a growing
portfolio that last year bought the Radisson Blu Aqua in Chicago, and aims to gather further assets “in prime cities around the world”.
The seller was SEB Asset Management,
the property
investment arm of the Swedish bank which had been holding the hotels in its open-ended SEB Immoinvest fund. The Grand Hyatt is a modern, 342 room hotel designed by Spanish architect Jose Rafael Moneo, centrally located opposite the city’s philharmonic concert hall. The Maritim, which opened in 2005 in a 1930s art deco style, is larger still with 505 rooms and a MICE capacity of 5,500. “We are delighted with the acquisition of the Grand Hyatt Hotel and the Maritim Hotel in Berlin,” said
sheikh Faisal Bin
Qassim Al Thani, chairman of Al Faisal Holding. “These two iconic hotels with their unique architectural qualities and prime, city centre locations reflect our clear
investment focus on high quality assets and bring us a step closer to our target. We will continue to build our portfolio locally and internationally and I look forward to further expansion all around the world over the coming years.” ARTIC currently has a
portfolio of 25 hotels complete or under construction, including many with major brands including Hilton and Marriott over the door. Its opened estate includes four hotels in Qatar, three in Egypt, the W hotel in London and Radisson Blu Aqua in Chicago. The pipeline includes six more Qatari hotels and three in Algeria. News of the deal came hard on the heels of the announcement of
the EUR700m sale of the French Louvre luxury hotel portfolio, to a Qatari investment group.
HA Perspective: Middle Eastern money likes hotels. The security and kudos of a luxury hotel in a gateway city usually counts for more than the modest returns such an investment is likely to generate.
There has been some interest in more modest hotel investments, such as Travelodge, but it is hard to see these investors going too far from their existing stomping grounds.
The really transformational
capital looks most likely to come from the US, with opportunity funds and REITs looking to seize bargains in more unloved segments.
Mint
hangover The sale of the Mint hotels portfolio was so successful that it raised sellers’ expectations and caused other transactions to drift along, according to Desmond Taljaard, COO at Starwood Capital Europe.
The full price for the deal, an estimated £610m at the end of 2011, caused banks to think they could get full value for other portfolios, added Taljaard, speaking at the Ernst & Young Real Estate Workshop 2013. The session, a hotel specific break-out from the
main
conference that focused on general real estate, hosted at London’s InterContinental on Park Lane, examined the outlook for hotel transactions and financing. Taljaard said financing was taking longer. He cited the locked
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