Starmel, a joint venture between Starwood Capital Group and Spanish hotel group Melia, has sold a portfolio of four Melia-branded hotels in Spain to London & Regional Properties.
The transaction volume is believed to be in the region of €230 mln.
Starwood Global Opportunity Fund X’s controlled affiliate owns 80% of the joint venture which owned the hotels, while Melia Hotels International holds the remaining 20% and will retain this share with the new investor.
According to CBRE, which advised Starmel, the joint venture continues to seek opportunities to acquire and integrate additional properties into the portfolio with a focus on the Mediterranean resort markets.
'The sale clearly indicates the appetite institutional investors have for quality Southern European resort properties. The strong performance we have seen in 2016 is continuing in 2017, which supports the competitive pricing we saw from the market,' commented Jorge Ruiz, senior director of CBRE Hotels.
The portfolio comprises 2,070 guest rooms plus leisure facilities, in hotels located in prime holiday destinations including Ibiza, Lanzarote, Mallorca and Costa de Sol. The properties have recently been fully refurbished and are branded as Sol Hotels and Resorts. They will continue to be operated by Melia Hotels International.
According to CBRE, the sale indicates the continued appetite for hotel investment in Spain where buyers are looking for quality hotel assets.
Spain recorded in excess of €2 bn in deals over the first half of 2017, reflecting an increase of 170% year-on-year. In H1 2017, close to 100 hotels with a total of 14,000 bedrooms were transacted.
'The weight of capital in the current market place means that we are seeing traditionally more conservative capital consider outside of major city locations,' commented Paul Kapiris, director of CBRE Hotels. 'As a result, yields continue to compress and we are seeing strong competition for stock. Fascinatingly, the interest we received for this portfolio came from a number of sources: HNW, institutional, and private equity, all of whom forecasted strong continued growth.'
