Global investment giant Patrizia has acquired the Malmaison hotel in Edinburgh city center for approximately £25 mln (€29 mln) on behalf of a UK institutional investor.
This prime location boasts a 72-room boutique hotel on St Andrew's Square, just steps from Edinburgh Castle, the St James Quarter, and the Royal Mile.
The property offers a secure long-term investment with an inflation-linked income stream, thanks to a 30+ year lease with a prominent UK boutique hotel group. It ranks third in average daily rate among Malmaison's 17 hotels and is projected to achieve 85-90% occupancy in 2024.
Completely renovated and launched in 2020, the hotel features exceptional design and architecture that complements Edinburgh's UNESCO World Heritage status.
Phil Irons, head of Transactions for UK & Ireland at Patrizia, said: ‘We are pleased to have acquired this exceptional asset in an off-market deal to further our client’s strategy to diversify into alternative sectors like hospitality. Edinburgh’s world-renowned reputation for culture, sport and business make it one of Europe’s strongest hotel markets, which is being further driven by the post-pandemic recovery in international tourism. While the transactions market remains muted, the current conditions continue to present attractive opportunities for us to acquire re-priced core assets that benefit from strong fundamentals.’
Duncan White, director, Fund Management at Patrizia, added: ‘We are really pleased to have found another strong re-priced core investment opportunity for one of our UK institutional clients. The Malmaison hotel is an evergreen property supported by strong occupational market fundamentals. We hope to acquire similar attractive re-priced core opportunities throughout the remainder of 2024 and beyond.’
Patrizia was advised by JLL, Burness Paull, and Colliers.
Edinburgh is one of the best-performing hotel markets in Europe with strong international tourism demand.
