KKR : FATTAL ACQUIRES SIX HOTELS IN SPAIN FROM KKR AND DUNAS CAPITAL IN TRANSACTION WORTH OVER 165 MILLIONread more
• High quality hotels in key strategic locations will accelerate Fattal’s international growth and add over 1,119 rooms
• Fattal plans €20 million new investment in properties and enhanced customer experience
• Acquisition forms part of Fattal’s new joint venture with Menorah, Harel and Leumi Partners
11 July 2022: Fattal Group (“Fattal”), one of Europe’s fastest-growing hotel groups, has signed an agreement with KKR, a leading global investment firm, and Dunas Capital to acquire six landmark hotels in Spain, for over €165 million. The transaction is expected to close in the second half of 2022 and will not impact guest reservations or experiences.
Located in key strategic beachfront locations on the islands of Ibiza and Mallorca, the six hotels, comprise four hotels and two apartment hotels and currently form part of the Alua Hotels & Resorts chain, each having a 4-star rating.
Totaling 1,119 rooms, the hotels boast a wide range of amenities and attractions such as pools, restaurants, bars, gyms, children’s rooms, and other recreational facilities. The hotels have historically had high seasonal occupancy rates and are seeing a steady increase in demand as guests return following the Covid pandemic.
The transaction marks the first undertaking by Fattal as part of a joint venture with institutional investors Menorah, Harel, and Leumi Partners. The partnership will finance the transaction from its own sources, in addition to a loan of approximately €95 million that the partnership intends to receive from a banking entity.
The purchased hotels – Alua Hawaii Ibiza (209 rooms), Alua Miami Ibiza (360 rooms), Aluasun Miami Ibiza apartment hotel (82 Apartments), Alua Hawaii Mallorca & Suites (230 rooms and 68 Hawaii Mallorca Suites), and Alua Palmanova Bay (170 rooms) – have in recent years benefitted from over €14 million of investment in the renovation and transformation of the hotels.
Fattal plans to invest a further €20 million in enhancing the facilities, amenities, and overall customer experience, and it is currently envisaged that the hotels will in due course rebrand to the Group’s well-known European hotel brands such as Leonardo, Leonardo Royal, and NYX.
Guy Vardi and Yaniv Amzaleg, who oversaw the transaction on behalf of Fattal, commented: “This exciting acquisition reflects Fattal’s ability to identify strategic opportunities and complete transactions of significant scale with top-tier international sponsors and partners. It presents us with a rare opportunity to acquire a high-quality portfolio of assets, timed to capitalize on the potential for a near-term return to travel, as well as the hotels’ fantastic locations – which will remain in high demand for years to come. In addition, through effective management, branding, product enhancement, and targeted investment there is a significant opportunity to grow value and generate strong returns for our investors.”
Guy Vardi and Yaniv Amzaleg recently joined Fattal to lead Fattal’s international M&A activities and joint venture. The two bring with them extensive experience on a significant scale in international transactions, having led international investment activities in recent years.
Rosa Brand, Director in EMEA Real Estate at KKR, added: “Since acquiring these hotels in 2017, we have invested significantly to transform and modernise the portfolio alongside our partners Dunas Capital and Alua, consistent with our European strategy of working with best-in-class local developers and operators. We are delighted that Fattal Group will be the new owners of the portfolio.”
Shai Raz, CEO of Fattal Hotels in Spain, remarked: “In recent years, Fattal has built a strong and profitable management platform for our hotels in Spain, that is consistent with the company’s ambitious growth strategy to expand in the most attractive areas of the European continent. We are delighted that with this deal we have created a strong presence on the Balearic Island and strengthened our overall position in Spain by bringing the total number of Spanish hotels to 16.”
Ronen Nissenbaum, CEO of Fattal Hotels in the UK, The Netherlands, and Spain, added: “I am delighted with the acquisition of the 6 hotels and their integration into our diverse and high-quality portfolio. With this acquisition, the company strengthens its presence as a leader in European holiday destinations. In addition to the quality of our hotels and our people, we look forward to leveraging our expertise and capabilities to drive positive performance and provide our customers with even greater products, experiences, and services”
David Angulo, Chairman of Dunas Capital, said: “It has been an honour to share our expertise in the Spanish market with our partners KKR and Alua to add value to this high-quality portfolio of prime assets. The combined capabilities of the three groups yielded very positive results. We believe that the Spanish tourism sector continues to have great potential and we congratulate Fattal Hotels for identifying this fantastic opportunity and investing in this trend.”
About Fattal Group
The Fattal hotel chain, owned by the Fattal family (62.08%), was established by David Fattal in March 1998, and specializes, through corporations it holds, owns, operates, rents, and manages, in hotels in Israel and Europe, as well as in the acquisition and construction of new hotels.
With over 44,0000 hotel rooms and a leadership position in countries such as Israel and Germa rooms andWith over 44,000 hotel , Fattal is the first Israeli hotel chain to lead the hotel market in a European country and is also considered a significant player in the UK, the Netherlands, and Spain.
In April 2022, Fattal Europe raised €336 million for the purchase of international hotels as part of an ambitious plan to expand its portfolio and brand presence internationally, giving it the ability to undertake up to €1 billion of transactions. Its property expansion program is managed by Fattal, Harel Insurance Partnership, Menorah Mivtachim, and Leumi Partners. This is the second partnership raised by Fattal after the first fund, established back in 2007, with institutional bodies as well.
KKR acquired the hotel portfolio through KKR Real Estate Partners Europe, KKR’s first dedicated European real estate fund. Since launching a dedicated real estate platform in 2011, KKR has grown its real estate assets under management to approximately $59 billion across the U.S., Europe and Asia Pacific as of March 31, 2022 KKR’s global real estate team consists of over 135 dedicated investment professionals, spanning both the equity and credit business, across 13 offices and 10 countries.
Fattal Group was advised by CBRE, Cushman & Wakefield and Hogan Lovells.
KKR was advised by Eastdil Secured, JLL, Freshfields Bruckhaus Deringer, Deloitte and Arcadis.
KKR is a leading global investment firm that offers alternative asset management as well as capital markets and insurance solutions. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and supporting growth in its portfolio companies and communities. KKR sponsors investment funds that invest in private equity, credit and real assets and has strategic partners that manage hedge funds. KKR’s insurance subsidiaries offer retirement, life and reinsurance products under the management of Global Atlantic Financial Group. References to KKR’s investments may include the activities of its sponsored funds and insurance subsidiaries. For additional information about KKR & Co. Inc. (NYSE: KKR), please visit KKR’s website at www.kkr.com and on Twitter @KKR_Co.
For further information please contact:
ON BEHALF OF FATTAL GROUP
+353 87 667 4305
+44 788 980 5930
ON BEHALF OF KKR
Alastair Elwen / Sophia Johnston
Telephone: +44 20 7251 3801
Email: [email protected]