Benson Elliot and Algonquin buy Novotel Edinburgh Park

 

Benson Elliot Capital Management and French hotel private equity investor Algonquin have teamed up to buy the Novotel Edinburgh Park from administrators KPMG.

 

The purchase of the 170-bedroom hotel is the second deal in the UK for Benson Elliott following the purchase of Milton Keynes leisure scheme CBXII in March through the Benson Elliot Real Estate Partners II fund.

 

Accor will continue to manage the hotel, which is located near Edinburgh Airport, under the Novotel brand. The acquisition was financed by Barclays Corporate.

 

It is the sixth acquisition in 18 months for Algonquin and is the 23rd hotel in its portfolio as well as its first investment in the UK.

 

Benson Elliot Real Estate Partners III – a €505m (£418m) equity fund closed last year and will begin investing in the second half of 2010.

 

Benson Elliot senior partner, Trish Barrigan, said:  “The global recession and subsequent property market decline have created the opportunity to buy hotels at meaningful discounts to replacement cost and, we believe, at or near the bottom of the operational cycle. 

 

“We’re actively looking at similar opportunities that represent good value today, but where there is also scope to add value through targeted capex spending and proactive management strategies.”

 

Algonquin chief executive, Jean-Philippe Chomette, said:  “Novotel Edinburgh Park is a good quality hotel in a strong and resilient market. The asset will benefit from the already evident recovery of the hotel market in Scotland, and the arrival of the tramline next to it in the next few years as well as Algonquin’s track record in successfully managing hotel assets.

 

“We would be very pleased to contemplate other similar opportunities in conjunction with Benson Elliot across Europe in the future.”

 

Mayer Brown, CMS and Brodies acted for Benson Elliot and Algonquin; Dundas & Wilson and Jones Lang LaSalle Hotels acted for KPMG.

 

bridget.oconnell@estatesgazette.com

 

To access all EGi news stories and commercial property data sign up for a free trial today, or visit the subscription options page to find out more.