Ares and EQ acquires £400 million UK hotel portfolio

Ares EQ

UK: Alternative investment manager Ares Management Corporation, alongside its operating partner EQ Group, have acquired 18 hotels from Landsec.

The portfolio consists of midscale and economy properties mainly located Central London, as well as Edinburgh, Manchester and Birmingham.

Some of the properties will be refurbished and repositioned, with Ares targeting energy efficiency and carbon footprint improvements across the whole portfolio.

Prior to the acquisition, the properties were fully let to AccorInvest under long-term leases. An agreement was made with AccorInvest to surrender the leases and transfer operations of the relevant hotels to Ares. 

As a result, Ares acquired 18 hotels with 3,028 rooms at a headline purchase price of £400 million. 

John Ruane, partner and co-head of Ares European Real Estate, said: “This transaction highlights our ability to create solutions which unlock assets in today’s dislocated market. The hotels are well located with an attractive weighting to the London market and have seen performance recover strongly since Covid. The rationalisation of the ownership and lease structure offer us exciting opportunities to add value over time.”

Namid Mangalji, senior managing director and co-founder at EQ, said: “We are delighted to partner with Ares to acquire this unique portfolio of hotels through a complex series of transactions. Together we can leverage our combined deep track record in deploying capex, operational turnaround, rebranding and repositioning.”

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