Ares Real Estate announces the acquisition of Landsec's hotel portfolio

Portfolio of revenue generating hotels concentrated in London and other major UK cities

LONDON, May 9, 2024–(BUSINESS WIRE)–Ares Management Corporation (“Ares”) (NYSE: ARES), a leading global alternative investment manager, today announced that funds managed by Ares Real Estate have acquired a Landsec’s hotel portfolio alongside hotel operating partner EQ. Group (“EQ”), a leading European hotel investment and management platform.

Before the acquisition, the buildings were entirely rented to AccorInvest under long-term leases. Concurrently with the completion of the acquisition, Ares entered into an agreement with AccorInvest to assign these leases and transfer the operations of the affected hotels to Ares. As a result of these transactions, Ares acquired 18 hotels with 3,028 rooms (the “Portfolio”) for an aggregate purchase price of £400 million.

The portfolio consists of mid-market and economy properties with the majority of value located in central London and the remainder of the assets primarily located in major UK city centers including Edinburgh, Manchester and Birmingham . The acquisition, which consolidates ownership of the Portfolio’s real estate and operations through the sale of AccorInvest leases, provides the opportunity to add value through the implementation of various asset management initiatives, including renovation and repositioning of certain assets. Alongside improving operational and financial performance of hotels, Ares will target improving energy efficiency and carbon footprint across the portfolio.

“This transaction highlights our ability to create solutions that unlock assets in today’s dislocated market,” said John Ruane, Partner and Co-Head of Ares European Real Estate. “The hotels are well located with an attractive weighting in the London market and have seen their performance recover strongly since Covid. Streamlining the ownership and tenancy structure provides us with exciting opportunities to add value over time .”

“We are excited to partner with Ares to acquire this unique portfolio of hotels through a complex series of transactions,” said Namid Mangalji, Senior Managing Director and Co-Founder of EQ. “Together we can leverage our strong combined experience in investment deployment, operational turnaround, rebranding and repositioning. »

The Ares Real Estate team oversees $48.8 billion in assets under management and has more than 270 investment professionals across seventeen local offices in major markets across the United States and Europe as of 31 March 2024. The team leverages its scale and vertically integrated operating platform to execute comprehensive debt and real estate strategies that are flexible across geography, product type and sector. In Europe, Ares Real Estate has a local team of approximately 70 real estate investment professionals and an experience of approximately three decades of activity.

About Ares Management Company

Ares Management Corporation (NYSE: ARES) is a leading global alternative investment manager providing clients with complementary primary and secondary investment solutions in the asset classes of credit, real estate, equity and investment and infrastructure. We seek to provide flexible capital to support businesses and create value for our stakeholders and within our communities. By collaborating across our investment groups, we aim to generate consistent and attractive investment returns throughout market cycles. As of March 31, 2024, Ares Management Corporation’s global platform had approximately $428 billion in assets under management and had approximately 2,900 employees operating across North America, Europe, Asia Pacific and the Middle East. For more information, please visit www.aresmgmt.com.

About EQ Group

EQ Group is a leading pan-European hotel investment and management platform that has invested, managed or managed assets in over €3.3 billion of hotel real estate across 9,400 rooms. EQ collaborates with leading hotel real estate investors, investment banks, family offices and private equity funds and has extensive experience creating value by acquiring assets and executing business plans complex projects encompassing investments, rebranding and operational turnarounds. EQ’s portfolio covers a wide range of hotels including internationally branded assets, independent luxury hotels, resorts, meetings and events hotels and serviced apartments in key destinations across Europe. For more information, please visit www.eqgrp.com

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