EUROPE NEWS: Colony’s Qatar connection

The Los Angeles-based investment firm once again finds an exit with Qatari investors. PERE Magazine June 2012 issue.

Colony Capital, the Los Angeles-based private equity real estate firm, struck a deal last month to sell Smerelda Holding, the owner of four hotels in Sardinia, to Qatar Holdings, which is in the midst of a drive into European real estate.

The sovereign investment firm, which was set up in 2006 by the Qatar Investment Authority, said it has signed a ‘definitive’ agreement to acquire the group, which comprises four luxury hotels – the Cala di Volpe, Pitrizza, Romazzino and Cervo – with a total of 372 rooms. The deal also includes the Porto Cervo Marina, the Porto Cervo Shipyard, the Pevero Golf Club, a 51 percent interest in 2,290 hectares of adjacent undeveloped land and various other real estate assets in Costa Smeralda.

This is not the first time that Colony has found an exit from a European investment with Qatar. Last year, the firm sold a majority stake in French Ligue 1 football club Paris Saint-Germain to Qatar Sports Investment, and it unloaded the remaining 30 percent stake this March.

It also is not the first time Qatar has acquired European real estate. In February, Qatar bought the 546,000-square-foot European headquarters of Credit Suisse in London’s Canary Wharf, where it already has a significant holding via Songbird Estates. At the end of last year, it acquired the future headquarters of Orange TPSA Telecom in Poland from Bouygues Immobilier. 

Of the latest deal, Ahmad Mohamed Al-Sayed, managing director and chief executive officer of Qatar Holding, said: “We intend to continue supporting the ongoing development programme, which will see Costa Smeralda strengthen its position as a top luxury resort destination.”

Tom Barrack, chairman and chief executive officer of Colony, which bought the assets in 2003 for €290 million from Starwood Hotels & Resorts Worldwide, added: “I have said before that Costa Smeralda is for no one to own…it owns you. Our job was to leave it better than when we found it.”