STARWOOD CAPITAL ACQUIRES PORTFOLIO OF 10 HOTELS FROM EDWARDIAN GROUP

Rhea-AI Summary

Starwood Capital Group (SCG) has acquired a portfolio of 10 hotels from Edwardian Group for an undisclosed sum via an off-market transaction. The portfolio comprises 10 hotels with 2,053 rooms. The acquisition adds to SCG's existing portfolio of European hotel investments, which following the transaction will comprise 47 hotels / c.10,000 rooms across Europe.

Insights

Market Research Analyst

The acquisition of a significant hotel portfolio in Central London by Starwood Capital Group represents a strategic expansion within the hospitality sector, particularly in a high-demand market. Central London's status as a global tourism and business hub makes this move noteworthy, as the acquired properties are likely to benefit from consistent demand, contributing positively to Starwood's revenue streams.

Hotel investments in prime locations such as Central London typically command high average daily rates (ADRs) and occupancy levels, translating to robust revenue per available room (RevPAR). Starwood's intention to invest capital expenditure (capex) into the portfolio suggests a focus on asset enhancement to further increase value. This could potentially lead to increased competitiveness and market share within the luxury hotel segment.

From a market research perspective, the partnership between Starwood Capital and Edwardian Group to explore future opportunities could indicate a trend towards collaborative investments in real estate, where operational expertise and local market knowledge are leveraged to optimize asset performance.

Financial Analyst

Starwood Capital's undisclosed acquisition sum is a critical aspect of this transaction's financial analysis. The lack of public financial details makes it challenging to assess the immediate financial impact. However, the long-term value creation potential through strategic investments in the properties can be significant. Investors will be keen on the return on investment (ROI) metrics from the capex and the subsequent operational performance of the hotels.

Given the scale of the acquisition—increasing Starwood's European portfolio to 47 hotels—economies of scale may be realized, potentially improving margins. The transaction is likely to have been financed through a combination of debt and equity, which will affect the firm's leverage ratios and cost of capital. The focus will be on how this acquisition aligns with Starwood's overall investment strategy and its impact on the firm's balance sheet.

Hospitality Industry Expert

The transaction underscores the resilience of the London hotel market, despite challenges such as economic uncertainty and changing travel patterns. The continued operation of the hotels by Edwardian Group during the transition period ensures operational continuity, which is crucial for maintaining service standards and guest loyalty.

Investing in capex to enhance hotel properties is a common industry practice to stay competitive, especially in luxury markets. Such investments typically aim to modernize facilities, incorporate advanced technology and improve guest experiences. The success of these enhancements will depend on their alignment with consumer preferences and trends within the hospitality industry, such as sustainable practices and personalized guest experiences.

Moreover, the mention of purpose-built, city-centre hotels by the CEO of Edwardian Group highlights the industry's shift towards specialized properties that cater to specific traveler demographics and needs, a trend that is gaining traction in urban hospitality development.

Acquisition of landmark Central London hotel portfolio

LONDON, Jan. 12, 2024 /PRNewswire/ -- Starwood Capital Group ("Starwood Capital"), a global private investment firm with a primary focus on real estate, announced today that a controlled affiliate has acquired a portfolio of 10 hotels from Edwardian Group for an undisclosed sum via an off-market transaction.

The portfolio comprises 10 hotels with 2,053 rooms. Edwardian Group will continue to own and operate The Londoner and its two Radisson Collection hotels, The May Fair and The Edwardian Manchester, following closing of the transaction.

Alongside the acquisition, Starwood Capital and Edwardian Group intend to collaborate on future opportunities together. As part of this relationship, Edwardian Group will continue to operate the portfolio on a transitional basis while Starwood Capital plans its future investment into the hotels.

The acquisition adds to Starwood Capital's existing portfolio of European hotel investments, which following the transaction will comprise 47 hotels / c.10,000 rooms across Europe.

Tim Abram, Managing Director at Starwood Capital, said: "We are delighted to have had the opportunity to acquire this one-of-a-kind portfolio of Central London freehold hotels. London is one of the world's most sought-after hotel markets, and this portfolio enables to us gain exposure on a unique scale to London. We plan to invest significant capex during our ownership into further enhancing the hotels."

Inderneel Singh, CEO of Edwardian Group, said: "Following the successful development of The Londoner and a period of strong trading across the portfolio, the sale represents an opportunity to refocus the group and position it for the next chapter of growth."

"Our three landmark properties – The Londoner, The May Fair Hotel, and The Edwardian Manchester – each mark our continued commitment to invest in and deliver distinctive experiences for guests in high-end, purpose-built, city-centre hotels."

JLL provided real estate advisory services and Baker McKenzie provided legal services to Edwardian Group for the sale. Paul Hastings (Europe) LLP acted for Starwood Capital on the acquisition.

List of Hotels

• Radisson Blu Edwardian Hampshire Hotel
• Radisson Blu Edwardian Mercer Street Hotel
• Radisson Blu Edwardian Bloomsbury Street Hotel
• Radisson Blu Edwardian Berkshire Hotel
• Radisson Blu Edwardian Kenilworth Hotel
• Radisson Blu Edwardian Grafton Hotel
• Radisson Blu Edwardian Vanderbilt Hotel
• Radisson Blu Edwardian New Providence Wharf Hotel
• Radisson Blu Edwardian Heathrow Hotel & Conference Centre
• Radisson Blu Edwardian Sussex Hotel

About Starwood Capital

Starwood Capital Group is a private investment firm with a core focus on global real estate. The Firm and its affiliates maintain 16 offices in seven countries around the world, and currently have over 5,000 employees. Since its inception in 1991, Starwood Capital Group has raised over $75 billion of capital, and currently has approximately $115 billion of assets under management. Through a series of comingled opportunity funds and Starwood Real Estate Income Trust, Inc. (SREIT), a non-listed REIT, the Firm has invested in virtually every category of real estate on a global basis, opportunistically shifting asset classes, geographies and positions in the capital stack as it perceives risk/reward dynamics to be evolving. Starwood Capital also manages Starwood Property Trust (NYSE: STWD), the largest commercial mortgage real estate investment trust in the United States, which has successfully deployed over $91 billion of capital since inception and manages a portfolio of $27 billion across debt and equity investments. Over the past 31 years, Starwood Capital Group and its affiliates have successfully executed an investment strategy that involves building enterprises in both the private and public markets. Additional information can be found at starwoodcapital.com.

About Edwardian Group

Edwardian Hotels London is one of the UK's leading privately owned hotel groups, which has been operating and developing its hospitality portfolio since Jasminder Singh OBE began his career within the hospitality industry in 1977; forming the beginnings of what would become Edwardian Hotels London.

The Londoner, Edwardian Hotels London's latest opening in London's Leicester Square, is the world's first super boutique hotel and incorporates 350 bedrooms and suites, six concept eateries and bars, The Residence, The Retreat, private screening rooms, seven inspiring meeting spaces and a stunning ballroom for 850 guests. The Londoner is a member of Preferred Hotels & Resorts' prestigious Legend Collection.

Edwardian Hotels London also owns and operates The May Fair, and The Edwardian Manchester, both part of premium lifestyle brand Radisson Collection, and a range of luxury restaurant and bar brands, including the award-winning bars and restaurants;  May Fair Kitchen, Peter Street Kitchen and May Fair Bar.

Media Contact for Starwood Capital:
Emma Prenn-Vasilakis
H/Advisors Abernathy
(212) 371-5999
emma.prenn-vasilakis@h-advisors.global

Media Contacts for Edwardian Group: 
Alex Simmons, alex.simmons@edelmansmithfield.com / +44 7970 174353
James Geddes, james.geddes@edelmansmithfield.com / +44 7811 752279

 

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SOURCE Starwood Capital

FAQ

How many hotels did Starwood Capital Group acquire from Edwardian Group?

Starwood Capital Group acquired a portfolio of 10 hotels from Edwardian Group.

How many rooms are included in the hotel portfolio acquired by Starwood Capital Group?

The portfolio comprises 10 hotels with 2,053 rooms.

What are the names of the hotels included in the portfolio acquired by Starwood Capital Group?

The hotels included in the portfolio are: Radisson Blu Edwardian Hampshire Hotel, Radisson Blu Edwardian Mercer Street Hotel, Radisson Blu Edwardian Bloomsbury Street Hotel, Radisson Blu Edwardian Berkshire Hotel, Radisson Blu Edwardian Kenilworth Hotel, Radisson Blu Edwardian Grafton Hotel, Radisson Blu Edwardian Vanderbilt Hotel, Radisson Blu Edwardian New Providence Wharf Hotel, Radisson Blu Edwardian Heathrow Hotel & Conference Centre, and Radisson Blu Edwardian Sussex Hotel.

What is the total number of hotels in SCG's European hotel investments after the acquisition?

Following the transaction, SCG's European hotel investments will comprise 47 hotels / c.10,000 rooms across Europe.

Who provided real estate advisory services to Edwardian Group for the sale?

JLL provided real estate advisory services to Edwardian Group for the sale.

Who provided legal services to Edwardian Group for the sale?

Baker McKenzie provided legal services to Edwardian Group for the sale.

Who acted for Starwood Capital on the acquisition?

Paul Hastings (Europe) LLP acted for Starwood Capital on the acquisition.