Starwood Capital Group and Melia Hotels International have established a joint venture that has agreed to acquire seven beachfront hotels for €176 million, subject to the approval of the European Union Merger Control Office.
Greenwich, Connecticut-based Starwood Capital will own 80 percent of the joint venture company, while Mallorca-based hotel chain Melia will own the remaining 20 percent.
The seven hotels being acquired are currently owned by Melia and the hotel chain will continue to manage the properties. Included in the initial portfolio are the Sol Principe in Malaga, the Sol Lanzarote and Melia Gorriones in the Canary Islands, the Sol Ibiza and Sol Pinet Playa in Ibiza, and the Sol Mirlos and Sol Tordos. The hotels will all be fully refurbished, and many will be renamed while the Melia Gorriones property will continue to operate under the Melia brand.
“With their irreplaceable locations, strong cash flow-producing businesses and consistent operating track records, these properties present an attractive portfolio with significant potential still to be realised,” Keith Evans, vice president European hotels at Starwood, commented. “We look forward to investing in these properties and leveraging Starwood Capital Group's hospitality expertise to help drive growth in the future.”
The joint venture is Starwood’s second transaction in Spain in recent months. In late October, the firm completed the acquisition of a portfolio of loans from BFA-Bankia Group that included a number of underlying real estate properties.