As hotels around the world stare at the current situation around COVID-19 and diminishing occupancy, buyers are still in the market to acquire properties.
Two in recent days have been seen, the fist being a joint venture between Singapore-listed Soilbuild Construction Group and iProsperity, an asset manager which manages funds for Chinese high net worth individuals. The pairing have acquired a portfolio of US boutique hotels at a discount agreeing to buy seven hotels from Xenia Hotels & Resorts for $477 million. The buying price is $2 million less than the $475 million NYSE-listed REIT acquired them for in 2015. Whilst the deal looks good on basic comparisons, and without further details of strategy, it could look expensive in months to come.
Also in France, Principal Real Estate Europe acquired the Cour des Loges Hotel in Lyon for €24.5m on behalf of the Principal Hotel Real Estate Fund II. We understand the deal secures a long-term lease with the Radisson Hotel Group, and in cooperation with Radisson, the new owners will renovate and reposition the hotel under the Radisson Collection brand.
Current levels of volatility on world stock markets is a roller coaster ride, a ride that has been unseen since the late 1980’s. Decisions on timings of hotel acquisitions, similar to the array of financial instruments traders around the world are making the same decisions on requires metal. The prizes are potentially huge, but so are the pitfalls.