Starwood Capital Group has maintained its investment momentum in Europe by acquiring the Cumberland Hotel in London in joint venture with private property company, London & Regional.
The firm, which only returned to investing in European real estate last year after a three-year absence, is paying Royal Bank of Scotland a reported £215 million (€260 million; $321 million) alongside London & Regional, run by brothers Ian and Richard Livingstone. Guoman Hotels, the hotel’s operator, will continue to manage the property according to a report in The Times.
Starwood returned to the European investment scene last March when it bought corporate debt backed by a portfolio of prime pan-European commercial real estate assets from an unnamed property company.
It then acquired Dutch hotel group, Golden Tulip, out of voluntary receivership, and thirdly, London office asset, City Tower at 40 Basinghall Street, for around £30 million (€34 million; $46 million).
In an interview with PERE published in May, head of European investments Sean Arnold, and head of European asset management, Desmond Taljaard, said the firm was not asset-class specific or geography-specific. “We are simply looking for what we think is the most interesting risk, reward profile,” said Arnold. “We are not allocators. We are kind of a classic deal shop constantly comparing the opportunities we can find here in Europe versus what we can find in other markets.”
Starwood raised $2.8 billion for its two latest funds – the $1.83 billion Starwood Global Opportunity Fund VIII and the $965 million Starwood Capital Global Hospitality Fund II, both of which closed earlier this year.
Arnold and Taljaard report the firm invested around $500 million of equity last year from its private equity funds (the firm also raised $921 million through the IPO of a mortgage REIT, Starwood Property Trust), with Europe making up just under 20 percent of the total.