Starwood Capital continues European push

Starwood Capital has been busy in Europe—snatching up hotels and selling others.

The latest buy is also the biggest deal for a hotel to go down in Edinburgh, Scotland since 2007, reports say. Starwood Capital has acquired the 199-room Roxburghe hotel in the city's Charlotte Square. Specific terms of the actual deal were not disclosed, but reports are saying that it is, indeed, the largest single-asset hospitality transaction in the city since the global recession.

The sale of the hotel was handled by JLL’S Hotel and Hospitality Group in Scotland and London. Keith McBain, director, JLL, called it a "landmark deal" for the Edinburgh and Scottish market. "The hotel has seen continual investment to improve the facilities for visitors since it was purchased in the late 1990s and we expect the new owners to continue that trend," he added.

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JLL said that Starwood Capital was looking to establish a foothold in Charlotte Square. As a result, some have contended that the company might have paid over market value.

News of the sale is rosy not only for Scotland, but Europe on a whole. "We see this interest in Scotland as an increasing trend, with money from domestic and overseas sources—particularly North America, China and elsewhere in the Far East," said George Nicholas, EVP of JLL. "There is real appreciation of the added value, compared with London, and Edinburgh along with a few Scottish cities are best placed to benefit from that sentiment."

The hotel itself dates back to 1791. More recently, in 2013, the hotel underwent a large renovation. It was at that time last year when the hotel was rebranded as the Crowne Plaza Edinburgh – The Roxburghe. It's still known colloquially as the Roxburghe.

The Greenwich, Conn.-based investment firm has been quite busy across the pond.

Earlier this year, it acquired UK-based hotel owner and operator Four Pillars Hotels. The transaction included a portfolio of five owned and leased hotels and one managed hotel comprising 863 rooms.

"Four Pillars offers high-quality, full-service, four-star hotels in superb locations," said Kevin Colket, SVP at Starwood Capital Group. "We look forward to building on the company's operational excellence and its longstanding client focus."

More recently, Starwood Capital and the estate of the collapsed bank Lehman Brothers sold the Meridien Etoile in Paris for a reported $380.5 million. At 1,025 rooms, the hotel is one of the largest in Europe. The hotel was reportedly purchased by private equity firm Mount Kellett Capital Management.

Last year, Starwood Capital parted with 40 Louvre Hotels, a move made to reduce to reduce debt and also finance more international expansion.


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