Switzerland-based Kempinski Group is getting a hotel in New York City for the first time in the company's 122-year history via a strategic partnership agreement signed earlier this week with Germany-based 12.18. Investment Group.
The Düsseldorf investment firm is expanding its portfolio outside Europe for the first time with the acquisition of the San Carlos Hotel, which will be rebranded as the 7Pines Kempinski Manhattan after a renovation.
Ultimately, the two companies will develop and open 20 7Pines-brand Kempinski Hotels through 2022, starting with the former 7Pines Ibiza in Spain, which will reopen in the spring under the name 7Pines Kempinski Ibiza. Another resort in Sardinia, Italy, will follow.
Carsten K. Rath, chairman of the advisory board of 12.18. and former Kempinski manager, initiated the deal and 12.18. plans to raise £500 million from institutional investors.
The company indicated the strategic orientation of the Kempinski Group's expansion will not only be based on management contracts, but through acquisition of hotels, with a focus on assets that can be renovated and then reflagged. Up until now, the only hotel owned by the company is the Hotel Vier Jahreszeiten Kempinski in Munich, Germany.
"By acquiring real estate, we benefit from the increase in value instead of paying money for management contracts," said Martin R. Smura, CEO/chairman of the management board, who stepped into the leadership role in July. "We have set ourselves ambitious goals to expand the portfolio of Kempinski Hotels with additional flagship hotels. This selective growth is focused on acquiring highly regarded hotels that will make a valuable contribution to our brand. We therefore select only those hotels that meet our brand values."
The Kempinski Group expects to have more than 100 luxury hotels open and operating worldwide by 2021. In the next 12 months, nine new hotels with a total of 1,961 rooms and suites will open: three of them in the Caribbean and one hotel each in Tel Aviv, Israel; Tbilisi, Georgia; Bangkok; Guangzhou, China; Brazzaville, Congo; and Almaty, Kazakstan. An additional seven hotels with 2,404 rooms are under construction.