CBRE GIP and UK’s Pygmalion Add Nine Spanish Hotels for New Euro Hospitality JV

Date: November 2018

Location: Seville, Madrid, Bilbao, San Sebastian, Santander, Tenerife, Valladolid and Ciudad Real, all in Spain.

Name: Were and still will be trading as Silken Hotels.

No. of Keys: 1,650

Seller: Silken Hotels (Urvasco) that went bankrupt in 2015 with €400m debt.

Buyer: CBRE Global Investment Partners and UK hospitality manager Pygmalion Capital Advisers have acquired nine 4-Star city hotels in Spain for a joint venture set up to engage in hotel repositioning across Europe.

Giving no financial details of the Spanish portfolio acquisition, the firms said in a combined statement that the European Hotel Venture has been launched and formally awarded, through a NPL transaction, the portfolio of regional city hotels in Spain. The assets were previously owned by the Urvasco construction group. The portfolio includes 1,650 hotel rooms, located in Seville, Madrid, Bilbao, San Sebastian, Santander, Tenerife, Valladolid and Ciudad Real. Silken hotels will operate them under a long-term agreement and the JV will implement a comprehensive refurbishment program.

CBRE GIP Head of Continental Europe Alexander van Riel said the group entered the Spanish hotel market for the first time, and won a sought-after portfolio. “The transaction is in line with our global strategy to establish scalable, programmatic ventures with sector specialists,” he said. “We will unlock value through selective value-add projects while at the same time benefiting from a stable and secure income stream. Over time additional investments will be sourced and we will also be looking at hotels with indexed leases.”

Christophe Beauvilain, founding partner of Pygmalion, added that the JV underlines the partner’s view that a significant opportunity exists to acquire, at attractive valuations, a pan-European portfolio of hotel assets and businesses by exploiting special situations generated by the non-performing loan market.

“The combination of European banks still saddled with large NPL exposures and numerous debt funds that have been actively buying NPL books provides a large source of attractive deal flow for our specialist strategy,” Beauvilain said. “The Silken portfolio provides us with a strong basis for rapid expansion in the Spanish market given our fast-growing pipeline of investment opportunities.”

Spanish legal practice Cuatrecasas, led by Fernando Bernad Ripoll, provided legal advice. Christie & Co and JLL were retained respectively for commercial advisory and technical due diligence.

Price: Undisclosed

THPT Comment: Silken had other hotels, whose future is….(we’ll find out)

First Seen: Business Immo