KKR and Baupost acquire 33 UK Marriott hotels from ADIA

Investment firms KKR and The Baupost Group have announced a joint venture to purchase a portfolio of 33 Marriott International hotels across the UK from a wholly owned subsidiary of the Abu Dhabi Investment Authority (ADIA) for an undisclosed sum. Amante Capital, KKR’s vertically integrated European hospitality platform, will serve as managing partner for the joint venture and the properties will continue as premium Marriott branded hotels. The portfolio consists of 33 full-service properties branded as Marriott and Delta by Marriott in London and prime regional cities including Edinburgh, Glasgow, Leeds and Liverpool. The 6,500 key portfolio benefits from recent refurbishments and features a mix of amenities catering to business and leisure guests, ranging from conference and event venues to golf and recreation. Working closely with Marriott International’s UK team, Amante will oversee a program of continued capital investment and provide dedicated services to support the local teams at each property in attracting business and delivering exceptional guest experiences. KKR has been a long-term investor in UK real estate, having deployed over US$3.5bn (£2.76bn) of capital since 2016 across hospitality, residential, student housing and logistics properties. KKR is making the investment primarily through its value-add and opportunistic European real estate strategy. DLA Piper, Ropes and Gray and Simpson Thacher Bartlett served as legal advisors to the KKR and Baupost joint venture. Meanwhile, KKR Capital Markets and Eastdil Secured arranged financing for the transaction. Additionally, Hamilton Pyramid served as asset manager, Eastdil Secured as advisor and Burges Salmon as legal counsel to ADIA. Mai-Lan de Marcilly, managing director and head of Transactions France and Hotels at KKR, said: “Our purchase of this impressive portfolio reflects our conviction in the UK and the opportunity we see to invest behind strong fundamentals and long-term growth in the European hospitality sector. “With Amante Capital we have built the capabilities to be a scaled acquirer and operator of premium hotels across Europe. This is our second investment with Marriott International in Europe and expands our global relationship as well as making us the largest owner of premium segment Marriott International hotels in EMEA.” Nick Azrack, partner at The Baupost Group, added: “This venture highlights our continued opportunistic approach to investing in high-quality assets. We are excited to collaborate with Amante, KKR and Marriott International on the future of these hotels.”