French asset manager Eurazeo has sold its stake in Spanish hotel portfolio FST Hotels to hospitality-focused private equity firm Extendam.
The portfolio comprises three hotels in Madrid and Barcelona, with a combined 543 rooms.
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In a statement, Eurazeo said the sale concludes an investment cycle that began in 2022, when FST Hotels was acquired through a joint venture.
The portfolio originally included five hotels with around 800 rooms and operated under the Ayre brand.
Eurazeo said non-strategic regional assets were sold first. The company then focused on repositioning the Barcelona and Madrid hotels.
The properties underwent “an extensive renovation and rebranding programme”, it added. The renovation programme revamped guestrooms, reception areas and food and beverage spaces. The works also included targets to reduce water and energy use and cut carbon emissions, aligned with Eurazeo’s sustainability commitments.
Following the repositioning, the portfolio moved under three InterContinental Hotels Group (IHG) brands.
After the transaction, the hotels will continue to be operated by Grape Hospitality, Eurazeo’s pan-European hotel platform.
Financial terms were not disclosed. However, Eurazeo said the transaction was completed at a valuation in line with the latest reported net asset value (NAV).
Total distributions to the joint venture partners over the investment period were around €100m. About €50m of that amount was attributable to Eurazeo’s balance sheet, it added.
Eurazeo Real Estate co-heads Riccardo Abello and Pierre Larivière said: “This transaction underscores Eurazeo’s Real Estate strategy commitment to transforming its portfolio companies by enhancing not only operational performance but also asset quality, with a focus on sustainable growth.
“It reaffirms Eurazeo’s operational excellence and real estate expertise. Finally, it marks the successful culmination of a partnership in a highly attractive European hospitality market, validating both our strategic vision and our execution capabilities.”
