$4.3B CitizenM Hotel Chain On The Block

The pension funds that own the global hotel chain citizenM are exploring options for the business, which could include a sale for as much €4B ($4.3B, £3.4B).

The chain is owned by Dutch pension giant APG and Singaporean sovereign wealth fund GIC, alongside founder Rattan Chadha. They have appointed Morgan Stanley and Eastdil Secured to advise on options for the business and to help it expand, The Financial Times reported.

Options could include the sale of a minority stake as well as a full sale, the FT reported. GIC bought a 25% stake in citizenM five years ago, and that deal valued the business at €2B. The chain has since grown from 15 hotels to 40 in North America, Europe and Asia, and new locations are under construction in Boston, Miami and Dublin. 

CitizenM was one of the pioneers in the hotel subsector offering smaller but well-designed rooms and large communal areas, like lobbies and bars. The rooms are prefabricated off-site and shipped to construction sites, which the company says allows it to build more cheaply and increase profitability. 

Rather than license its brand and design guidelines to landlords and hotel operators, citizenM is somewhat unique in that it owns stakes in and co-develops its hotels, such as in Washington, D.C., with partner Altus Realty and in Austin with Turnbridge Equities.

"We can confirm that citizenM is looking for new growth capital and is looking to further expand globally with the support of new capital partners, with an exciting and ambitious profitable growth plan ahead," a citizenM spokesperson said.

After the depths of the pandemic, global tourism grew in 2023, reaching 90% of pre-pandemic levels, according to figures from U.N. Tourism. That led to revenue per available room finishing 2023 12% higher than in 2019 on a global basis, according to JLL data. 

UPDATED: MAR. 28, 12:30 P.M. ET: This story has been updated to include a quote from CitizenM.