FONCIÈRE DES MURS BUYS PRINCIPAL HOTELS FOR £858 MILLION
Foncière des Murs has signed an agreement to buy Principal Hotels, a portfolio of 14 four- and five-star hotels including two development properties, from Starwood Capital for £858 million (£325,000 per room). At the same time, the French real estate trust has agreed to sign long-term triple net leases for 13 of the properties with InterContinental Hotels Group (IHG), targeting a yield of 6% on stabilisation.
The deal is a major move for IHG, given the asset light approach it has adopted in recent years. There are currently only four other leased properties that IHG operates, and the 13 new leases will offer variable rents and a guaranteed minimum. While IHG is yet to commit to a full branding strategy for the portfolio, the deal will see the first Kimpton property open in the UK, as well as the group’s new upscale conversion brand which will be launched in the second half of 2018.