Starwood Capital has launched a mandate for £330m of debt to refinance part of its UK hotels portfolio. The US private equity firm has invested around £750m in UK hotels and hospitality assets over the past 12-18 months, with purchases including 23 De Vere Venue hotels in March, backed by £140m of debt from RBS and Barclays.
Last year Starwood Capital, led in the UK and Europe by Jeff Dishner, bought the 23-hotel Principal Hayley Group, which was put up for sale by Lloyds. The chain includes city-centre hotels, conference and training venues, among them the Hotel Russell in London and Grand Central Hotel in Glasgow.
Starwood also bought a portfolio of Four Pillars hotels in January. Eastdil Secured has been appointed to source the debt and has just begun the process. The UK hotels portfolio market has been one of the most active in Europe in the past 12-24 months. Property Week reported last week that the Lehman Brothers estate/GIC consortium that owns 61 Holiday Inn hotels has put 21 up for sale.
The whole portfolio went through a protracted £585m refinancing after the securitised debt matured, a process that was eventually completed success-fully last year. Starwood Capital has been investing its global Opportunity Fund IX. The $4.2bn vehicle held its final closing a year ago and is already believed to be almost fully invested. Much of the capital has been invested in Europe. The group has begun capital-raising for Fund X.