Starwood Capital has entered a joint venture to invest €500m in Spain’s hotel sector with asset manager HI Partners.

The firm’s Global Opportunity Fund X will own 70% of the joint venture company, while HI Partners will own the remaining 30%.

Starwood Capital last year raised around $10bn (€6.9bn) in capital commitments for its tenth opportunistic real estate fund.

HI Partners, majority-owned by Banc Sabadell, will manage the joint venture, expected to deploy around €500m in the next three years.

Keith Evans, vice-president at Starwood Capital Group, said the company saw the Spanish hotel market as “extremely attractive, due to its positive fundamentals, strong demand from both national and international guests and the steady recovery of the broader economy”.

The joint venture will focus on three and four-star leisure hotel assets with more than 200 rooms in primary tourist destinations including the Balearic Islands, Canary Islands, Costa del Sol, Costa Dorada and Costa Brava.

It will also target high-quality urban hotels in Barcelona and Madrid.

In June last year, Starwood Capital Group and operator Meliá Hotels International completed a joint venture to acquire hotels in key Spanish resort locations.