Brookfield to Buy SACO for £430m

Date: November 2017… Exchanged February 2018

Location: Across the UK

Name: SACO Apartments. The business has 39 operational assets throughout the country, nine of which are freehold and operated by design-led “lifestyle” Locke brand that aims to appeal to millennials. The remainder are leased assets and branded as SACO.

Additionally, there are more than 900 rooms in SACO’s development pipeline that will be owned freehold and branded Locke once they are completed. As well as one site in Manchester and three in London, this includes an international expansion to Dublin and Amsterdam.

SACO’s online platform is also included in the package – a reservations service that provides access to third-party private owners and other serviced apartment businesses.

No. of keys: 39 locations

Seller: Oaktree Capital Management, advised by Eastdil.

The sale forms part of Oaktree’s wider strategy to cash in on some of its UK investments that it made between 2012 and 2013 in order to return cash to maturing funds.

Oaktree first entered the serviced apartment sector when it backed Central London Serviced Apartments (headed up by Max Thorne, now at JLL) to buy sites in the capital, a business which it merged with SACO when it bought the platform in 2015.

Buyer: Brookfield, advised by JLL and KPMG. The platform was previously under offer to Korean hospitality group Aju, but the deal was not given board approval.

This acquisition marks a first foray into the serviced apartment sector for Brookfield, as well as being the largest serviced apartment investment deal in the UK to date.

Brookfield has recently become increasingly active in alternative asset classes in recent times, particularly in student housing. At the beginning of the year it acquired 13 UK student housing properties from Unite in a £295m deal.

Price: £430m

THPT Comment: SACO could be described as a hybrid business, as is common in the serviced apartment sector, between being an owner, management company and agency! Much competition on this one, from the Korean Aju, Mapletree, Invesco and even Cycas.

A great deal for Brookfield and confirms the serviced apartment sector as a mature sector of the hospitality industry, if anyone was in doubt! We hope that Stephen Hanton and his team will stay on…

First Seen: Estates Gazette