Transactions - MAY 2, 2017

Walton Street Capital JV acquires hotel in Barcelona

by Andrea Waitrovich

A joint venture between affiliates of private equity real estate fund managers U.K.-based Benson Elliot Capital Management and U.S.-based Walton Street Capital, in partnership with Highgate, a global real estate investment and hospitality management company, has acquired the Hotel Silken Diagonal in Barcelona, Spain.

The hotel was acquired from a consortium of investors led by Oak Hill Advisors. As part of the sale, Highgate also will assume management of the hotel, which will be rebranded as the Gates Hotel Diagonal Barcelona, a Highgate independent brand. The deal represents the second hotel investment by Benson Elliot and affiliates of Walton Street following the purchase of an approximately €420 million ($458 million) portfolio of eight hotels in October 2015.

Hotel Silken Diagonal totals 240 rooms across nine floors and is located in Barcelona’s 22@ district.

European hotel deal activity dropped almost 10 percent from the record high of €21 billion ($23 billion) in 2015 to €19 billion ($21 billion) in 2016, still the second highest level ever recorded, according to PwC. The decrease was largely driven by a slowdown in transaction volumes in the United Kingdom, which fell by more than 60 percent, due to uncertainty surrounding the Brexit vote. Germany attracted a record level of investment and accounted for 27 percent of all European transactions by volume in 2016 followed by the United Kingdom (25 percent), Spain (11 percent) and France (8 percent).

PwC’s European cities hotel forecast all the European cities are expected to see growth in 2017 and 2018. Strong demand has propelled some cities into the spotlight yet again while others have moved up or down the growth rankings. In 2017 Porto leads the growth pack with almost 15 percent projected RevPAR growth; Dublin could see 8.7 percent RevPAR growth and further robust growth is expected in Budapest (6.8 percent), Madrid (5.9 percent), Lisbon (5.6 percent), Prague (5.5 percent) and Barcelona (5.4 percent).

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