M&G Investments and DRC Capital are providing a €187.5m debt package for the €265m purchase of 20 Queens Moat House hotels across Germany. Israeli investor Zenprop bought the 15 Holiday Inns, four Best Westerns and one Queens Hotel in 14 German cities, from KKR and Goldman Sachs Whitehall Funds.
The hotels generate an annual revenue of €107m and will be operated by Fattal Hotels, Israel’s largest hotel operator. M&G lent €150m of senior debt and DRC provided a €37.5m junior loan, for up to five years. “The investment is in line with our expansion plans – the hotels complement our existing Leonardo chain,” said David Fattal, chief executive of Fattal and Leonardo hotels.
“We are negotiating further projects in major European cities.” Steven Cowins, a partner at SJ Berwin, which advised Zenprop, said: “It is interesting to see debt funds filling a space once occupied by banks. “We believe this trend will continue as the range of assets banks focus on lessens. Alternative assets with operational risk are not top of their list.”