Singapore sovereign wealth fund GIC has agreed to acquire a majority stake in Mediterranean luxury resort operator Sani/Ikos Group for €2.3 billion.
A series of investors, including U.S.-based asset manager Oaktree Capital, Goldman Sachs’ asset management arm and London-based private equity firm Hermès GPE, have exited the business after selling their shares. increase. GICThey first joined when a merger in 2015 formed the hotel group.
Since 2015, revenues for the Greek-headquartered group, which owns and operates 10 beachfront resorts with approximately 2,700 rooms in Greece and Spain, tripled from €88 million to this year’s forecast of €319 million increased more than Sani/Ikos is also proceeding with his €900 million five-year expansion plan, which will add four more redeveloped resorts to his portfolio.
The acquisition by GIC comes amid growing fears of a recession across Europe this winter. energy crisis Russia’s full-scale invasion of Ukraine has eroded consumer confidence. Most of Sani/Ikos’ customers come from Germany and England. But a Singapore government fund is betting that the luxury sector will weather the recession.
Last month, Fitch Ratings downgraded the group’s long-term debt outlook from “stable” to “negative,” but kept the rating at B-. The business’ cash flow may come under pressure from large scale expansion plans, but compared to its peers in the luxury hotel sector, it has shown “lower demand sensitivity” to consumer downturns and “above-average post-pandemic growth”. He said he was benefiting from “the record of recovery”. .
Lee Kok Sun, chief investment officer of GIC’s real estate division, said the “excellent hospitality experience” for guests helped set Sani/Ikos apart. “We believe this investment will generate resilient returns and is a testament to our confidence in the Greek and wider European tourism sector in the long term,” he added.
The deal is expected to be completed by the end of the year.
GIC told the Financial Times in July that its investment strategy is focused on businesses where inflation can be contained and higher costs can be passed on to clients.This year, GIC bet It is located at The Student Hotel and Student Roost, an office real estate and university accommodation provider in Paddington, London.
Sani/Ikos traces its origins to the Sani Club, a resort opened in 1971 by Greek hotelier Anastasios Andreadis, and has expanded over the decades since.
Andreadis’ sons Stavros and Andreas became major shareholders of the group along with former Oaktree executive Mathieu Guillemin when Sani Resorts and Ikos Resorts merged to form the group in 2015. All three will remain shareholders and continue to operate the business.
Co-CEOs Andreas Andredis and Guillemin said in a joint statement that the company has achieved “remarkable growth” in recent years, “despite the pandemic.” Bookings across the 10 resorts this year are up 52% from last year, and at pre-pandemic levels he’s up 57%. The company said bookings for early 2023 were strong.
“We are now able to consolidate our leading position across the Mediterranean for the benefit of our shareholders, employees and the communities in which we operate,” they added.