Lone Star has put its £600m Atlas Hotels business up for sale.
It has appointed Eastdil Secured and Rothschild to market the company, which owns 47 limited service hotels across the UK, all but one of which are operated under the Holiday Inn Express brand.
Investors are to be approached in the next couple of weeks with a view to completing a deal by the end of the year.
The portfolio, which comprises 5,575 bedrooms, of which 15% are in London, was previously branded Somerston Hotels. The portfolio includes development opportunities, mostly in the capital, that would boost the portfolio’s size by almost 1,000 bedrooms. They could be built in a two-year timeframe. The price reflects a 7% yield.
TPG attempted to buy the portfolio at the start of the summer but withdrew from a proposed deal.
Lone Star acquired the assets as part of its purchase of the £5.2bn non-performing loan portfolios Projects Rock and Salt from IBRC last year.
Atlas is led by managing director Keith Griffiths and is run separately to Lone Star’s other UK hotel interests.
The sale of Atlas will look to build on the strong appetite for hotels at present.
Last month, Apollo agreed to buy a £1bn portfolio of 19 Holiday Inns and three Crowne Plazas from Lehman Brothers, GIC and Realstar.
Starwood Capital and London & Regional were underbidders for the portfolio and are likely to have their interests piqued by Atlas.
In July, Lone Star merged 89 hotels, including 29 Jurys Inns, to create Amaris Hospitality with a £2bn portfolio. It is likely that Amaris will be sold or floated in the next two years.
david.hatcher@estatesgazette.com
