China's Cindat joins UK's Aprirose in QHotels portfolio deal

The Midland, Manchester, UK

China's Cindat Capital Management and UK investor Aprirose are reportedly in talks to acquire UK-based QHotels Group, which is valued at over $660 million. Aprirose has planned to claim a 50-percent stake in QHotels while Cindat has planned to own the remainder. The buyers have aimed to reach an agreement with current QHotels owners Bain Capital Credit and Canyon Partners within the next few weeks. 

Founded in 2003, QHotels operates a 26-property portfolio of four-star hotels across the UK. In 2014, its owners Bain Capital Credit and Canyon Partners invested in QHotels during Irish Bank Resolution's liquidation proceedings. The two firms acquired a portfolio of QHotels loans. 

A Sensitive Subject

Since the Chinese government imposed strict regulations on overseas investments last month, hotel acquisitions by Chinese developers and investors have become more sensitive. China said it will enforce restrictions on foreign transactions in various industries, including property, film and sports. Meanwhile, the government has been encouraging deals in other industries, including agriculture and oil exploration.
 
Any hotel sale would increase the current total value of hotel acquisitions by Chinese investors this year at $4.2 billion. That's more than double the volume reached in the same period in last year, according to a survey by Bloomberg. However, none of these have been finalized, and it's not certain these discussions will end with a transaction. 

In a deal with Hersha Hospitality Trust, Cindat, which is backed by China Cinda Asset Management, acquired 70 percent of seven Manhattan hotels for $571 million in 2016. The firm has planned to diversify its assets, as its interest in warehouses and student housing in developed markets, like the U.S., UK and Australia, has grown, Greg Peng, CEO at Cindat Capital Management, told Bloomberg.