UK real estate company Land Securities Group PLC completed a £400 million (€462.6 million) sale of its hotel portfolio to real estate funds managed by Ares Management Corp. and its operating partner EQ Group.
Landsec said its sale is in line with the company’s strategy to dispose of assets it cannot scale and to focus on areas where it has competitive advantage, the company said in a May 8 news release. The company plans to initially use the net proceeds of the sale to repay debt.
The hotel portfolio, made up of 21 assets concentrated in London and other major UK cities such as Edinburgh, Manchester and Birmingham. was fully let to AccorInvest. As part of the deal, Ares signed an agreement with AccorInvest to give up these leases and transfer operations of the relevant hotels to Ares, according to a May 9 news release from Ares. The US-based company acquired 18 hotels with 3,028 rooms, Ares added in its news release.
Mark Allan, the CEO of Landsec, said:
“We said in late 2020 that our focus would be on areas where we have a genuine competitive advantage. In line with that strategy, we have continued to recycle capital out of assets where our ability to add further value is limited. The sale of our hotel portfolio and other non-core assets will further strengthen our balance sheet and leave us well placed to take advantage of opportunities in the market as they arise.”
Prior to Landsec’s sale of its hotel portfolio, the company disposed two small retail outlets, one retail park, two leisure assets and a local shopping centre in London through multiple separate transactions.