U.S. Duo Buys £900M Hotel Portfolio From ADIA
U.S. investors KKR and Baupost have teamed up to buy a portfolio of 33 UK hotels for £900M in one of the largest UK real estate deals this year.
Private equity firm KKR and hedge fund Baupost are buying the portfolio of hotels operated under the Marriott and Delta by Marriott brands from the Abu Dhabi Investment Authority. Green Street News first reported the deal.
The portfolio includes the London Marriott Hotel County Hall on the Southbank opposite the House of Parliament and London Marriott Hotel Regent's Park.
A consortium comprising Societe General, BAML and Deutsche Bank provided a £600M loan for the purchase, React said.
A filing from the European Commission’s competition authority entered at the end of October said it had cleared the acquisition.
UK hotels are having a stellar year, and investment could top £5B in 2024, according to data from Knight Frank. The activity is being driven by U.S. opportunity funds completing large portfolio deals, transactions that, like the KKR and Baupost deal, have been underway for a considerable length of time.
Earlier this year, KKR bought the 132-room Park Grand London Kensington Hotel in west London for an undisclosed price. Amante Capital worked with it on the deal. A notice filed in July showed that KKR had raised £463M for its third European real estate fund.
Baupost has been a sporadic investor in UK real estate over the past five years. It was part of a consortium that bought serviced office operator Argyll Club out of administration in 2021, and it is now selling the company for £400M.
A legal row with its joint venture partner thwarted Bauposts's effort to buy the huge empty office development at the Royal Albert Docks.
ADIA bought a portfolio of 47 Marriott hotels from Royal Bank of Scotland for £640M in 2013. The bank had taken control of them after funding their purchase for £1.2B in 2007 by a consortium that included Delek Global Real Estate, Igal Ahouvi Group and Quinlan Private.
