Investment giants KKR and The Baupost Group have entered a joint venture to acquire 33 Marriott International hotels across the UK. The transaction, facilitated through a subsidiary of the Abu Dhabi Investment Authority (ADIA), marks a significant milestone in the European hospitality sector.

Amante Capital, KKR’s European hospitality arm, will act as managing partner for the venture, ensuring the seamless operation of these premium properties.

“This acquisition showcases our confidence in the UK market and the resilience of the European hospitality sector,” said Mai-Lan de Marcilly, Managing Director at KKR. She added, “With Amante Capital, we’ve established the infrastructure to become a leading acquirer and operator of premium hotels in Europe.”

The portfolio includes properties branded as Marriott and Delta by Marriott, located in major cities such as London, Edinburgh, Glasgow, Leeds, and Liverpool.

These 6,500-key hotels cater to both business and leisure travellers, offering features like conference facilities, recreation areas, and high-quality amenities.

Expanding relationships and expertise

This acquisition deepens KKR’s relationship with Marriott International and makes the joint venture the largest owner of premium Marriott hotels in Europe, the Middle East, and Africa (EMEA).

The collaboration is poised to deliver enhanced guest experiences through strategic investment and operational improvements.

Nick Azrack, Partner at The Baupost Group, expressed enthusiasm for the deal: “This venture underlines our opportunistic approach to acquiring high-quality assets. We’re looking forward to working closely with Amante, KKR, and Marriott to maximise the potential of these properties.”

Amante Capital will manage the hotels, collaborating with Marriott’s UK team to drive continued investment and operational excellence. The management plan includes initiatives aimed at attracting diverse clientele while maintaining the high standards associated with Marriott brands.

A bold move in UK real estate

KKR has been a consistent investor in the UK, deploying over $3.5 billion since 2016 across various sectors, including hospitality, residential, and logistics. This latest venture aligns with KKR’s value-add and opportunistic European real estate strategy, reflecting its commitment to the region’s long-term growth.

The deal involved notable legal and advisory firms, including DLA Piper, Ropes & Gray, Simpson Thacher Bartlett, and Burges Salmon. Financing arrangements were handled by KKR Capital Markets and Eastdil Secured, with Hamilton Pyramid and Eastdil Secured serving as advisors.

This acquisition signals confidence in the UK's economic recovery and the potential for growth in its hospitality sector. However, it also raises questions about the role of private equity in shaping the industry’s future.

As global players increasingly acquire significant assets, local markets may face both opportunities for innovation and challenges of consolidation.