A joint venture between UK-based Benson Elliot and US-based Walton Street Capital, L.L.C. (“Walton Street”), in partnership with Schroders (the “JV”), has sold the Sheraton Hotel in Warsaw to Patron Capital (“Patron”), the pan-European institutional investor focused on property-backed investments. The transaction marks the eighth and final disposal from the Prime Europe Hotels (the “Portfolio”), a portfolio of eight full-service hotels across seven European gateway cities acquired in October 2015.
The eight freehold properties total 2,308 rooms in Venice, Paris, Milan, Rome, Warsaw, Nuremberg and Brussels, and are located adjacent to key demand generators, either in metropolitan city centres, high-growth commercial corridors or leisure destinations.
The JV has unlocked significant value through the deployment of bespoke capital expenditure programmes and asset management initiatives, including room upgrades, management contract renegotiations, and operations and revenue management optimisation. The weighted hold period across the portfolio was 18 months and the assets have all been sold ahead of underwriting, delivering over €600 m in proceeds to investors.
The Sheraton Warsaw is a five star hotel, with 350 bedrooms and is located in the centre of the Polish capital. Under its ownership, the JV deployed c. €6 million to refurbish rooms and common areas, and secured planning permission for an additional ground floor retail unit.
Marc-Olivier Assouline, Benson Elliot Principal and Director of Hotels, said:
“This has been a highly successful undertaking where we joined forces with two long-standing partners, identifying a compelling opportunity with significant value-add potential, which we have now delivered in an efficient timeframe. We achieved attractive pricing for all the assets, taking advantage of the increasing institutional appetite for hotels and delivering superior returns for our investors.”
Stephane Obadia, Schroder’s Head of Hotel Investment, said:
“The acquisition of the portfolio has been a challenging but unique opportunity to bring a new life to one of the most attractive collection of hotels across Europe. While Schroders will continue to manage the repositioning of the most significant properties, this transaction concludes a very successful collaboration with our partners, built on a common vision and a high level of trust put on our capacity to execute such changes.”