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The majority owner of Motel One Group has taken full control of the budget hotel chain in a transaction that values it at €4.1bn, the latest sign of a return to dealmaking in the hospitality sector following the end of the pandemic.
Proprium Capital Partners, a real estate private equity group, has sold back its 35 per cent stake in Motel One to the company’s majority shareholder, One Hotels & Resorts, according to a statement on Tuesday.
Proprium is selling its stake for €1.25bn, having acquired it for €65mn in 2007, providing the company with a more than 20-times return on invested equity when dividends are taken into account. The deal values Motel One at €4.1bn including debt, said Proprium.
The transaction follows a rebound in travel after the end of the coronavirus crisis that led to airlines recording record profits in 2023 and has triggered dealmaking among hospitality businesses.
The owners of boutique chain CitizenM are currently exploring options including a potential sale, as the group seeks to expand and capitalise on rising demand from travellers. It could be worth roughly €4bn in a deal, the Financial Times has previously reported, having been valued at half of that five years ago.
Meanwhile Saudi Arabia’s Public Investment Fund bought a 49 per cent stake in Sir Rocco Forte’s luxury hotel group in December, with plans to double the chain’s size over the next five years.
Munich-based Motel One has expanded from Germany since Proprium’s original investment, with 94 hotels and 26,470 rooms in countries including the UK, France, US and Spain at the end of last year.
“Together with Proprium, we have built Motel One into an international platform and brand and expect continued strong and profitable growth in the future,” said Motel One founder and supervisory board chair Dieter Müller in a statement.
The group said on Tuesday it planned to expand to 117 locations and more than 32,00 rooms across 56 cities. Third-quarter sales increased 15 per cent to roughly €231mn, according to its latest financial report.
“While the sale of our stake in Motel One will generate very attractive returns for our investors, we leave Motel One very well positioned,” said Proprium head of Europe Philipp Westermann.
Proprium was spun out of Morgan Stanley’s real estate special situations investing team, and has more than $4bn of net assets under management. Its other assets span hospitality, residential and logistics sectors such as Admiral Taverns and the student housing provider Collegiate.
The real estate market has experienced a slowdown over the past two years, triggered by higher borrowing costs, but stabilising inflation and market expectations that central banks will soon begin reducing interest rates is expected to lead to a pick-up in activity.
Last week Gucci owner Kering said it had bought a retail block on Milan’s top shopping street from Blackstone for €1.3bn, the largest property deal in Europe over the past couple years.
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