Starwood Capital Group isn't just expanding its reach into Asia. This week, the company acquired its third hotel in Manchester, England, paving the way for further growth in a booming city.
A controlled affiliate of Starwood Global Opportunity Fund X (SOF X) acquired the 298-guestroom Holiday Inn Manchester City Centre (which opened just a year ago) from London's Dominvs Group. Terms of the off-market transaction were not disclosed, but the asset, which will be managed by Kew Green Hotels under a franchise agreement, will continue to be branded as a Holiday Inn.
In a statement, Jon Asumendi, VP at Starwood Capital Group, said that the Holiday Inn Manchester City Centre has already generated strong cash flow during its first year of operations. "As one of the premier UK hotel operators, and the largest Holiday Inn franchisee in Europe, Kew Green Hotels will bring what we believe is world-class operational expertise to this asset," Asumendi said.
The acquisition is Starwood Capital’s third investment in Manchester. In 2013, the firm, via Starwood Distressed Opportunity Fund IX (SOF IX) acquired The Palace hotel—a landmark property that reopened as The Principal Manchester in November 2016, following a £21-million refurbishment and rebranding as part of the launch of the new urban lifestyle hotel group, Principal. In 2014, Starwood Capital, via SOF IX, acquired The Royal Exchange, a mixed-use building within Manchester’s retail and office. The firm sold The Royal Exchange in November 2016.
"As arguably England’s second-most important city, and one of the largest beneficiaries of international investment in the UK outside of London, Manchester is being transformed by redevelopment across the city,” added Asumendi said. "We remain bullish on the city’s economy and its prospects for continued growth.”
JLL’s Hotels & Hospitality Group advised the seller on the transaction.