Monday, December 4, 2023
Monday, December 4, 2023
HomeNewsFoncière des Régions buy Principal Hotel Company for £858M

Foncière des Régions buy Principal Hotel Company for £858M

The owners of the Blythswood Hotel and the Principal Grand Central Hotel in Glasgow, Starwood Capital Group,  has sold its portfolio of 14 UK hotels to Foncière des Régions, through its subsidiary dedicated to hotel real estate, Foncière des Murs for £858M.  It is the first entry into the British market for the company.

The French investment company has bought The Principal Hotel Company which consists of 14 leading, full-service hotels (2,638 keys) is split across two distinct landmark brands, Principal (12 hotels) and De Vere (2 hotels). The properties include The Principal Edinburgh George Street (formerly The George Hotel) and The Principal Edinburgh Charlotte Square (formerly The Roxburghe Hotel).

Foncière des Régions has agreed to sign long-term FRI leases for 13 of the properties with InterContinental Hotels Group (IHG) who will rebrand and operate the hotels as part of its luxury and upscale brands portfolio.

“This landmark transaction represents a major milestone in our remarkable journey with The Principal Hotel Company,” said 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 U.K. hotel companies to form a leading platform. With this sale to Foncière des Régions, we will have realized 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 relaunch the Principal and De Vere brands to the market. The De Vere brand recently celebrated its official relaunch following substantial investment across the estate, which saw its historic, mansion house hotels extensively renovated to celebrate their British heritage and stunning natural landscapes. Following the successful 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 the U.K.’s leading independent conference hotel group.

Dominique Ozanne, Deputy CEO of Foncière des Régions said, “Foncière des Régions is continuing its strategy to move upmarket in the hotel real estate industry. This acquisition is an opportunity to duplicate the development strategy already rolled out in France, Germany and Spain.”

Eastdil Secured and UBS served as advisors on the transaction.



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