Fattal Hotels & Resorts expands in Spain through the latest Investment Fund Round

Israel’s Fattal Hotels & Resorts is on the lookout for hotel acquisitions, which executives say will likely include assets and even a portfolio in the U.S.

On July 11, Fattal agreed to buy six hotels in Spain by KKR and Dunas Capital in a transaction worth more than €165 million ($165.7 million), with hotels on the islands of Ibiza and Mallorca likely to be rebranded under the firm’s Leonardo Royal brand umbrella. The six beachfront properties – four resorts and two aparthotels – have a total of 1,119 rooms. The properties are in two clusters, one on each island, and were previously branded Alua Hotels & Resorts.

Fattal also owns and operates the Leonardo, Leonardo Suites, NYX and U Hotels brands, and co-owns and operates Jurys Inn.

“We are definitely a buyer,” said Ronen Nissenbaum, Fattal’s UK, Ireland, Benelux, Spain, Portugal and US CEO In his career, Nissenbaum was president and CEO of Dan Hotels Israel and managing director at the Waldorf Astoria New. York when the hotel was sold to the Chinese firm Anbang Insurance for $1.95 billion at Blackstone in October 2014. He also opened Singapore’s Marina Bay Sands, where he was senior executive vice president.

Nissenbaum joined Fattal in April and was immediately tasked with getting the latest deal across the board.

“If we believe in the market, in the city, at the hotel level, we will be an active player in the market,” he said.

The deal is a joint venture between owner-operator Fattal – the largest shareholder – insurance firms Harel and Menorah Mivtachim, capital markets firm Leumi Partners and two other insurance firms, Hachshara and Shlomo.

Nissenbaum said it’s the second time founder and CEO David Fattal has closed a major fund.

“The first one was 10 or 12 years ago, with institutional capital in Germany and everyone came out smelling like roses. now, [Fattal] has invested 100 million euros, as well as the other partners. We have raised €400 million, and when all is said and done, it should be close to €1 billion in spending power,” he said.

The capital to buy the six-asset portfolio comes from the 165 million euro fund, which has been in the works for about a year, and roughly 80 million euro to 90 million euro of debt, Nissenbaum said.

In April, Fattal bought an asset with 53 rooms in Mallorca and 207 rooms in Málaga for approximately 40 million euros before the fund was launched, but their purchase cost is included in it, Nissenbaum added.

In July 2021, Fattal acquired 72.5% of the boutique hotel chain 7Minds, previously owned by two entrepreneurs Ben Braverman and Oren Pascal, while in December 2017. took charge of 37 Jurys Inn properties in a partnership with new portfolio owner Pandox AB.

Now, Fattal is eager to buy more hotels, including urban and leisure assets, Nissenbaum said. Fattal is working on several other opportunities and the plan is to spend the entire current fund by the end of 2022.

Nissenbaum said Fattal is confident in its investment strategy with global travel demand growing and island resorts and hotels booming.

“We see that confidence in the numbers, especially in the last few months, since April. Business has boomed, occupancy is back, close to the same levels as the peaks of 2019 and average rates have exceeded it in many cases,” he said. has been a focus from Fattal in Spain. Destinations such as Ibiza and Mallorca, the destinations of flights, yes, but the light ones, have done extremely well during the pandemic, probably because the resorts there are very seasonal. They’re used to being closed for five or six months a year, so the lockdown wasn’t such a shock to the system.”

Another focus of Fattal’s is creating multiple hotels and brands in each country, or “bundling,” Nissenbaum said.

“We’re going to ask ourselves if we want to create an adults-only resort [or] just for family? We have that flexibility,” he added.

City hotels are also on the company’s agenda.

“There are many opportunities in London, some in the Netherlands. Most of the hotels, 80% to 90%, will be urban”, he said, adding that in terms of expenses it would be a 50-50 split between the two types of hotels.

“We will not spend [the 1-billion-euro fund] irresponsibly,” he said.

However, the real push will be breaking the U.S. for guests and investors, Nissenbaum said. He added that Fattal considered the move seven or eight years ago, but it was decided that the company lacked the necessary elements to make it a success.

“Doing this from Israel is complicated. From London it is possible”, he said.

New York City will likely be his first port of call for Fattal.

“It is the American city that has suffered the most. It has not fully recovered, but we see this as an opportunity,” he said, adding that spending in the US will not be part of the latest fund.

“Fattal understands the value of brand recognition in the U.S. and New York City is the No. 1 destination for Israelis,” said Nissenbaum. “If the hotels there are realizing 80% occupancy, we’re saying with Israeli travelers, and we own the largest travel agency in Israel, we can add 5% or 6% more, and that makes a big difference. “

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