New York-based private equity firm Apollo Global Management has acquired a portfolio of 18 hotels across Europe from Ivanhoé Cambridge, the real estate subsidiary of Canadian institution Caisse de depot et placement du Québec.
No purchase price was revealed in a joint statement by the two organizations today, however UK commercial property magazine Property Week reported it to be €425 million.
Apollo completed the investment via its Apollo European Principal Finance Fund II, which closed on €2.5 billion in 2012 and was raised to buy loans from European lenders to residential, commercial, consumer and corporate assets that are facing stressed or distressed financial situations.
Roger Orf, head of Apollo’s real estate unit in Europe said the investment coincided with the firm’s belief that the hospitality sector in Europe would continue to offer opportunities for investments. Of this deal, he said it fitted with Apollo’s strategy of engaging in “complex and illiquid situations where we can work with sellers to provide solutions.”
“This acquisition builds on the strong foundation of successful investments Apollo’s funds have made in the hospitality sector for nearly two decades. Over the past several years, the first Apollo European Principal Finance fund acquired and successfully realized gains on investments in several large European hotel properties through non-performing loan transactions. It’s our view that the European market will continue to generate opportunities in the hotel and other commercial property sectors.”
Sylvain Fortier, Ivanhoé Cambridge executive vice president, residential, hotels and real estate investment funds, described the sale as an exercise in “rationalizing our overall hotel exposure” and commented that the proceeds from the sale would be reinvested “in our core asset classes and in key markets globally”.
He said: “This sale brings to a conclusion a long-term investment for Ivanhoé Cambridge, and we are very pleased with the transaction process.”
The investment includes a hotel located in Austria, one in Belgium, one in France, 11 in Germany, two in the Netherlands and two in Spain. They are operated under the IHG brands of Crowne Plaza, Holiday Inn, and Holiday Inn Express.
Jones Lang LaSalle brokered the transaction. Hogan Lovells provided legal counsel to Ivanhoé Cambridge and Ashurst was legal counsel for Apollo on the transactio