Starwood Capital Group and Melia Create Joint Venture to Acquire Portfolio of Spanish Resorts
February 27, 2015 7:36am
Initial Portfolio Consists of Seven Beachfront Hotels Representing 2,933 Keys
The initial portfolio for the joint venture consists of seven well-established beachfront hotels representing 2,933 keys that are currently owned by Melia Hotels International and will continue to be managed by Melia upon completion of the transaction. The properties will be acquired by the joint venture in a transaction valued at €176 million ($198 million), subject to the approval of the European Union Merger Control Office.
Included in the initial portfolio are the Sol Principe in Malaga, the Sol Lanzarote and Melia Gorriones (Fuerteventura) in the Canary Islands, the Sol Ibiza and Sol Pinet Playa in Ibiza, and the Sol Mirlos and Sol Tordos (Palmanova, Mallorca). The hotels will all be fully refurbished, after which the Sol Principe, Sol Lanzarote, Sol Mirlos and Sol Tordos will continue to operate under the new Sol Hotels brand, with the Sol Mirlos and Sol Tordos being renamed as the Sol Palmanova. Sol Ibiza will become Sol Beach House Ibiza and Sol Pinet Playa will be renamed Sol House Pinet Ibiza. The main portion of the Melia Gorriones property will continue to operate under the Melia brand, and the current annex will be rebranded as Sol Beach House Fuerteventura.
A controlled affiliate of Starwood Capital will own 80% of the joint venture company, while Melia Hotels International will own the remaining 20%. The joint venture plans to seek out opportunities to integrate additional properties into the portfolio.
"We are delighted to be partnering with Melia on this transaction, and to build on the strong relationship we have already established with the company's executive team," said Keith Evans, Vice President, European Hotels at Starwood Capital Group. "With their irreplaceable locations, strong cash flow-producing businesses and consistent operating track records, these properties present an attractive portfolio with significant potential still to be realized. We look forward to investing in these properties and leveraging Starwood Capital Group's hospitality expertise to help drive growth in the future."
The joint venture represents Starwood Capital Group's second transaction in Spain over the last several months. In late October, the Firm completed the acquisition, through a controlled affiliate, of a portfolio of loans from BFA-Bankia Group that included a significant number of real estate properties as underlying collateral. Starwood Capital Group has acquired more than $63 billion of real estate assets globally since its inception in 1991, including approximately 2,300 hotels and resorts.
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