Starwood Capital has continued its drive into the hospitality sector with a €110 million loan for a Spanish hotel.
The whole loan has been secured by hotel operator Ikos International, to finance the acquisition and redevelopment of Ikos Andalusia, a luxury seafront resort in the Spanish region’s coastal area of Estepona. Ikos has invested €150 million in the hotel, which is scheduled to open in May 2020, the firm said.
The floating-rate debt facility, with a five-year maturity, has been provided on a 50:50 basis through listed debt vehicle Starwood European Real Estate Finance Limited and US mortgage real estate investment trust Starwood Property Trust.
“The financing has been provided in the form of an initial advance along with a capex facility to support the sponsor’s repositioning strategy,” Starwood said in a note to investors. “The group expects to earn an attractive risk-adjusted return in line with its stated investment strategy,” it added.
The deal was brokered by HFF’s debt placement team, led by director Brad Greenway and managing director Edward Daubeney, who advised the borrower. Ikos currently manages two resorts in Greece, with two others expected to be delivered in May 2018 and May 2019.
The financing was “competitive and flexible”, said Andreas Andreadis and Mathieu Guillemin, managing partners of Ikos. “We believe [Starwood] will be a strong long-term partner throughout our future developments,” they added.
Starwood has showed continued appetite for the hotel segment. Recent deals include a £45.9 million (£52.5 million) mezzanine financing for a UK hotel portfolio, a €60 million financing for Citywest hotel in Dublin and a €46 million loan facility for a Barcelona-based hotel.
In Spain, the firm has now originated four loans with a total commitment of €163 million. Alongside the UK and Ireland, Spain remains one of the group’s top target markets for further opportunities, Starwood said.