Henderson Park is doubling down on the Paris hotel market with its latest purchase, the firm said on Wednesday.
The London-based firm is buying the Westin Paris-Vendôme from GIC, Singapore’s sovereign wealth fund, for €550 million, according to a source familiar with the deal. GIC purchased the hotel in September 2005 for $392.7 million, per data provider Real Capital Analytics.
The 428-room hotel, built in 1878, overlooks the Louvre Museum and occupies a full city block, with amenities including three restaurants and bars, meeting spaces, a gym and a salon.
In November 2016, Henderson Park bought Paris’s largest hotel, Le Méridien Etoile hotel, for about €365 million,PEREpreviously reported. The firm has also invested the Athens and UK hotel markets with three purchases.
Lingering fears after 2015’s terror attack have dampened the Paris tourism market, but advisory firm PWC predicted the sector will rebound in 2018. In a March report, the firm said Paris room rates fell 4 percent year-on-year in 2016, with a further drop forecasted this year before the market rebounds in 2018.
For the latest buy, Henderson Park founder Nick Weber highlighted expected growth from French President Emmanuel Macron’s pro-business administration, along with particular events such as the 2024 Olympic Games to boost the city’s status as a tourist destination.
“In addition to what the Westin Paris-Vendôme offers now, the proposed acquisition also reflects what more we believe it can be and we have a long-term vision, involving a significant investment that builds on this hotel’s rich heritage and will allow us to unlock its full potential,” Weber said in a statement.
The firm is raising its first fund, Henderson Park Real Estate Fund I, which corralled $950 million in a first close in October, PERE previously reported. Even though Henderson Park’s capital has been raised for value-add-to-opportunistic strategies, the assets the firm has picked up thus far have a distinctly prime feel to them.
“They are large, institutional assets, some of which are throwing off a huge amount of cashflow. That doesn’t sound very opportunistic,” Weber toldPERE in a previous interviewthis fall. But he said the current market creates opportunities for such properties to generate higher returns.
After leaving New York-based investment manager Mount Kellett in September 2015, Weber launched Henderson Park in July 2016 with backing from Stone Point Capital, another New York private equity firm, US and Kuwait investment firm Wafra Investment Advisory Group and sovereign wealth fund Kuwait Investment Authority.