The Fattal Group, a hotel investment firm focused on Europe and Israel, has acquired six hotels in Spain for over €165 mln from global investment firm KKR and Dunas Capital.
The transaction is expected to close in the second half of 2022.
Situated in beachfront locations on the islands of Ibiza and Mallorca, the six hotels include four hotels and two apartment hotels and currently form part of the Alua Hotels & Resorts chain, each having a 4-star rating.
Totaling 1,119 rooms, the hotels comprise a wide range of amenities and attractions such as pools, restaurants, bars, gyms, children's rooms, and other recreational facilities. The hotels have historically had high seasonal occupancy rates and are seeing a steady increase in demand as guests return following the Covid pandemic.
Guy Vardi and Yaniv Amzaleg, who oversaw the transaction on behalf of Fattal, commented: 'This exciting acquisition reflects Fattal's ability to identify strategic opportunities and complete transactions of significant scale with top-tier international sponsors and partners.
'It presents us with a rare opportunity to acquire a high-quality portfolio of assets, timed to capitalise on the potential for a near-term return to travel, as well as the hotels’ fantastic locations - which will remain in high demand for years to come.
'In addition, through effective management, branding, product enhancement, and targeted investment there is a significant opportunity to grow value and generate strong returns for our investors.'
The transaction marks the first undertaking by Fattal as part of a joint venture with institutional investors Menorah, Harel, and Leumi Partners. The partnership will finance the transaction from its own sources, in addition to a loan of approximately €95 mln that the partnership intends to receive from a banking entity.
The purchased hotels - Alua Hawaii Ibiza (209 rooms), Alua Miami Ibiza (360 rooms), Aluasun Miami Ibiza apartment hotel (82 Apartments), Alua Hawaii Mallorca & Suites (230 rooms and 68 Hawaii Mallorca Suites), and Alua Palmanova Bay (170 rooms) – have in recent years benefitted from over €14 mln of investment in the renovation and transformation of the hotels.
Fattal plans to invest a further €20 mln in enhancing the facilities, amenities, and overall customer experience, and it is currently envisaged that the hotels will in due course rebrand to the group’s European hotel brands such as Leonardo, Leonardo Royal, and NYX.
Vardi and Amzaleg recently joined Fattal to lead Fattal's international M&A activities and joint venture.
Rosa Brand, director in EMEA Real Estate at KKR, added: 'Since acquiring these hotels in 2017, we have invested significantly to transform and modernise the portfolio alongside our partners Dunas Capital and Alua, consistent with our European strategy of working with best-in-class local developers and operators. We are delighted that Fattal Group will be the new owners of the portfolio.'
Shai Raz, CEO of Fattal Hotels in Spain, remarked: 'In recent years, Fattal has built a strong and profitable management platform for our hotels in Spain, that is consistent with the company's ambitious growth strategy to expand in the most attractive areas of the European continent.
'We are delighted that with this deal we have created a strong presence on the Balearic Island and strengthened our overall position in Spain by bringing the total number of Spanish hotels to 16.'
