Hotel Investment Deals Activities

This is our summary of a number of interesting deals on hotel acquisitions & financing activities worldwide: this week’s highlight: Bank of China rising in London, another deal done in Miami, new hotel fund for India by Accor.

Bank of China beats local lenders to finance £100m luxury London hotel

The Bank of China has swooped to fund a landmark hotel in London's West End, in the latest sign that the capital has become the darling of Far East investment.

The Bank of China has agreed terms with the Splendid Hotel group to provide a £50m development loan to build a 254-room hotel near New Scotland Yard. The six-storey hotel, which will have a final value of at least £100m, will occupy the freehold site of the 19th-century former Queen Anne's Chambers.

It is thought Lloyds and Barclays were considering financing the hotel, whose construction costs will be roughly between £180,000 and £200,000 a room, but Bank of China swooped on the deal.

Bank of China and other Chinese banks have been looking for deals outside China, one of the reasons is that Chinese banks have been worried that the Chinese real estate market is overheated; and there are better value and better yields in markets elsewhere. Although this is the first deal announced in London, Bank of China has been active in financing hotel projects in SE Asia as well as some parts of North America.

Sunstone Hotel buys Miami hotel for $126.1M

Lodging property owner Sunstone Hotel Investors Inc. said Monday that it bought the Royal Palm hotel in Miami Beach, Fla., for $126.1 million at a foreclosure auction.

The company plans to renovate the 409-room beach front hotel with new furniture, fixtures, equipment and operating supplies.

Sunstone is in the process of selecting a manager for the hotel. The deal is expected to close in the third quarter.

In the recent months, there has been substantial increase number of acquisitions announced in Florida, especially in Miami, some of these hotels were bought by mainly New York and California based groups; as well as Canadian, German, Singaporean and Japanese real estate investment groups.

Accor: Creates New Hotel Investment Fund In India

French hotels group Accor SA Wednesday said it has created a fund with InterGlobe to hold new hotels in India and will be on acquisition lookout across the region. 

The fund, which will also be owned by Pacifica Partners, will initially hold seven hotels worth around $325 million and is scheduled to launch between 2011 and 2013, the company said. Accor and Interglobe will each own 32% stakes and Pacifica will hold 36%, subject to regulatory approval.

Accor has been in India for five years through its joint venture with InterGlobe, and has opened eight hotels in the country. The hotels group's strategy is to operate hotel brands of all ranges in the country, from luxury to budget hotels. 

Accor and other European real estate groups have been expanding their hotel portfolio in India, initially these were focused on major cities; but has since spread to other emerging tourism destinations. This is a new fund that many Indian hotel developers could find it useful.

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