International hotel group Hilton has detailed plans for the spin-off of its real estate assets into a new real estate investment trust (REIT) to be called Park Hotels & Resorts.
The new unit will own most of Hilton's properties and will be the second-largest publicly traded REIT in the lodgings industry. It will have earnings before interest, taxes, depreciation and amortisation of $825 mln (€728 mln) in 2016, Hilton said in a statement.
Hilton first announced in February that it was to spin off its lodging properties and time-share business to create three separate, publicly traded companies in a move aimed at boosting shareholder value.
'As a result of the proposed transactions, we expect to unlock growth opportunities that are embedded within the three businesses and take advantage of capital market and tax efficiencies,' commented Hilton's president and chief executive Chris Nassetta. Nassetta added that Hilton planned to complete the spin-off process later this year.
Park Hotels & Resorts' portfolio will consist of 69 premium-branded hotels and resorts with nearly 36,000 rooms located in the US and internationally. Over 85% of Park's rooms are luxury and upper upscale and nearly 90% are located in the United States. The unit will be led by industry veterans Tom Baltimore, previously president and CEO of RLJ Lodging Trust, as chief executive and Sean Dell’Orto, currently senior vice president & treasurer of Hilton, as chief financial officer.
