Starwood Capital Group and Spanish hotel operator Melia Hotels International have established a joint venture that will acquire a collection of hotels across key resort locations in Spain.
The joint venture’s initial portfolio consists of seven beachfront hotels representing 2,933 keys currently owned by Melia Hotels International and will continue to be managed by Melia upon completion of the transaction, which is valued at $198 million.
Included in the initial portfolio are the Sol Principe in Malaga; the Sol Lanzarote and Melia Gorriones (Fuerteventura) in the Canary Islands; the Sol Ibiza and Sol Pinet Playa in Ibiza; and the Sol Mirlos and Sol Tordos (Palmanova, Mallorca). The hotels will all be fully refurbished, after which the Sol Principe, Sol Lanzarote, Sol Mirlos, and Sol Tordos will continue to operate under the new Sol Hotels brand—with the Sol Mirlos and Sol Tordos being renamed as the Sol Palmanova. Sol Ibiza will become Sol Beach House Ibiza and Sol Pinet Playa will be renamed Sol House Pinet Ibiza. The main portion of the Melia Gorriones property will continue to operate under the Melia brand, and the current annex will be rebranded as Sol Beach House Fuerteventura.
A controlled affiliate of Starwood Capital will own 80 percent of the joint venture company, while Melia Hotels International will own the remaining 20 percent. The partnership plans to seek out opportunities to integrate additional properties into the portfolio.
“We are delighted to be partnering with Melia on this transaction, and to build on the strong relationship we have already established with the company’s executive team,” says Keith Evans, vice president of European Hotels at Starwood Capital Group. “With their irreplaceable locations, strong cash flow-producing businesses and consistent operating track records, these properties present an attractive portfolio with significant potential still to be realized. We look forward to investing in these properties and leveraging Starwood Capital Group’s hospitality expertise to help drive growth in the future.”
