Private equity firms Cerberus and Orion have teamed up to acquire control of a Spanish tourist resort from NH Hotels Group for €225 mln.

Private equity firms Cerberus and Orion have teamed up to acquire control of a Spanish tourist resort from NH Hotels Group for €225 mln.

The resort features two hotels, two golf courses, land rezoned for development and the operation of sports and tourist services in the south-western Spanish port city of Cadiz.

The private equity firms took control of the Cadiz resort through the acquisition of almost 97% of local real estate company Sotogrande, a subsidiary of NH Hotels.

Under the agreement, Madrid-headquartered NH Hotels (known as NH Hoteles in Spanish) will continue to manage the two hotels for an initial period of two years. The transaction does not include Sotogrande's international assets, Sotocaribe in Mexico, Sotogrande at Cap Cana in the Dominican Republic and Donnafugata Golf Resort & Spa in Italy.

CONTINENTAL DRIFT
NH Hotels said in a statement that the transaction resulted in the company far outstripping its earlier guidance of €125 mln in proceeds from asset sales in 2014.

In June the hotel group agreed a €62 mln sale-and-leaseback agreement for the NH Amsterdam Centre with France's Foncière des Murs as part of a broader plan to work together in Europe. A year earlier NH Hotels completed a similar sale-and-leaseback deal in relation to NH Grand Hotel Krasnapolsky in Amsterdam for €157 mln with AXA Real Estate and Chinese hospitality and tourist group HNA.

The hotel and resort sales come at a time when NH Hotels is moving into China, potentially one of the largest hospitality markets in the world. The strategy ties in with HNA's desire to expand in Europe.

To facilitate its European expansion, HNA invested €234 mln to become the largest shareholder in NH Hotels in 2013 and acquired the Krasnapolsky which NH Hotels still manages. The partnership has grown further this year with the signing of a memorandum of understanding in September that heralds NH's entry into the Chinese market.

The pair are setting up a new Beijing-based company, named HNA-NH Hotel Management Joint Venture Company, to manage a portfolio of HNA and third-party hotels in the mid and upper mid-class segments in China. The initial assets to be managed by the joint venture are six hotels, comprising 1,312 rooms, that are operated under HNA brands.