Blackstone Invests Over $523 Million in Southern European Resorts

Blackstone, the New York-based world’s largest alternative asset manager, has invested $523.72 million into hotels in southern European holiday spots over the past year, as the world’s largest real estate investor continues to expand its vast portfolio to capitalise on booming post-pandemic tourism. 

According to a report in Financial Times, in the latest deal, completed on Tuesday, Blackstone has acquired the Grand Hyatt Athens from private real estate groups Henderson Park and Hines for $246.16 million. The deal takes Blackstone’s total investment in hotels across Greece, Spain, Italy and Portugal over the past year to $523 billion, the report said.

Quoting James Seppala, head of real estate for Europe at Blackstone, the report said that Southern European countries were experiencing spurt in visitor numbers from all over the world, alongside longer summer seasons — all pointing to strong long-term investment fundamentals.

Hotel investment has become one of investors’ key focuses in Europe, pushed by a post-pandemic bounce in travel and increased room rates across the region. A surge in M&A activity in the European hotel sector is expected in the coming year with 54% of businesses responding that they plan more acquisitions, according to research by Deloitte.

The trend across southern Europe, notably Spain and Portugal, appears particularly positive, the research said, as investors seek growth in a region where global hotel brands remain underpenetrated compared to other parts of Europe, the report said.

The region has suffered from an increase in fires, drought and extreme heatwaves, which risk deterring tourists. But these changes have also contributed to more bookings in the so-called “shoulder seasons” before and after the peak summer months. 

Blackstone’s Acquisitions

Blackstone has amassed a portfolio of about 22,000 hotel rooms across more than 70 properties in southern Europe, including 10 hotels in Greece, the report said. 

It bought Hotel Investment Partners (HIP), a Spanish hotel group, in 2017 and has overseen a rapid expansion. HIP has snapped up properties across the region, typically in small deals often with family owners, and invested to refurbish them before leasing them to hotel operators including Ritz-Carlton, Hilton and Marriott. 

Singapore’s sovereign wealth fund (SWF) GIC bought a 35% stake in HIP last year, valuing the hotel business at $4.19 billion. The two investors said the deal would provide cash to support further growth. HIP will operate the Athens hotel which has been acquired by Blackstone.

Henderson Park and Hines, which previously operated the hotel, bought the property in 2017 and have since added more rooms and brought in the Hyatt brand. 

Real estate investment bank Eastdil Secured and brokers JLL advised on the sale to Blackstone, the report added.