Henderson Park, the London-based private equity real estate firm founded by Nick Weber, has sold its position in The Westin Paris – Vendome, in a deal believed to value the hotel at approximately €650 million.
The exit brings Henderson Park’s five-year association with the 440-room prime hotel to an end and marks a significant divestment for its first pan-European value-add fund, Henderson Park Real Estate Fund I, which hauled almost $3 billion of equity from investors, including sidecar money.
According to a report by the Financial Times last year, the 340,000 square foot hotel was ‘discreetly’ put on the market for €800 million in a move designed to test ‘appetite for such trophy hotels in a post-coronavirus world’.
While that valuation was not achieved with one partner selling its stake to the other, according to prior PERE coverage, Henderson Park and Dubai Holding originally acquired the hotel in 2018 from Singapore state investor GIC for €550 million, indicating a profit nonetheless.
The sale also demonstrates further appetite for marquee hotels among large institutional-level investors. Earlier this month, Toronto-based mega-manager Brookfield sold The Diplomat in Miami to a joint venture comprising bank platform Credit Suisse Asset Management and manager Trinity Investments in a deal valued at $835 million.
However, like the Diplomat, the Westin Paris is considered a landmark asset and so is not expected to trigger the start of a wider hotel buying trend. Christophe Kuhbier, managing director at Henderson Park, said in a statement: “The Westin Paris-Vendome is an irreplaceable property in a landmark location in one of the world’s best hotel cities and, no matter the market conditions, constitutes an attractive investment proposition to investors seeking unique assets.”
“We successfully steered the hotel through difficult macroeconomic times and ultimately achieved a positive return for our investors by selling our interest to our joint-venture partner.”
In another statement Dubai Holdings said its acquisition was part of a ‘long-term strategy of global expansion that is focused on boosting its presence in strategic destinations across the world’.
As a state-backed investor, it is not beholden to limited life investment vehicles so is unlikely to have timing pressure to sell the hotel in the future. “Dubai Holdings continues to pursue strategic investments to create long-term and sustainable value for the Group,” the firm said in its statement.
According to JLL’s Global Hotels Investment Outlook 2023, global hotel investment volume was down 2 percent year-on-year in 2022 at $71.9 billion, far from the post-global financial crisis cycle high in 2015 when $97.8 billion of assets transacted. But while investment totals have some way to go before matching pre-covid highs, occupation numbers tell a better story. According to the research, occupancy in 2022 compared to 2019’s level was 89 percent.