Leonardo Hotels has celebrated the completion of its fortieth hotel acquisition in Europe, in a period of just two years. The brand, part of Israeli group Fattal Hotels, has achieved the growth with the backing of a range of investors supporting asset purchases that provide a strong pipeline for the Fattal brand portfolio.
To date, Leonardo has been able to purchase over EUR1.5bn of hotel assets, adding more than 6,000 rooms to the group’s inventory across Europe. Most recently, the company acquired a 12-strong portfolio of Dutch hotels, catapulting Leonardo to a leading position in the Benelux hotel market.
Creating investment funds
Funding for the acquisitions has come via a series of investment funds, created by the Fattal European Partnership, the investment arm of the Israeli-listed company. Three separate funds have been created, their backers secured, and funds deployed acquiring attractive hotels across Europe. Fund II spent around EUR850m buying 19 hotels, while the third fund has already drawn in more than EUR400m from investors.
The strategy for acquisitions has been to look for upscale hotels that will deliver a great experience for guests and a strong return for investors, which can be suitably branded under one of the Fattal hotel operations. These include Leonardo, NYX, Leonardo Royal and the Leonardo Limited Edition collection brand.
“Located in prime locations, these hotels are positioned to deliver strong financial returns and an exceptional guest experience,” said Guy Vardi, M&A director of Fattal and co-managing director of Fattal European Partnerships. “We launched Fund II during the high uncertainty of Covid and inflationary pressures, which we believe created a dislocated market. The fact that we are an owner-operator allowed us to acquire beautiful properties. Our plan is to continue this successful model.”
In the UK, the group’s purchases included landmark properties the Grand Hotel in Brighton, Dilly in London and Hotel Gotham in Manchester. Meanwhile, in Edinburgh the Leonardo Royal hotel is being extended, adding 100 rooms while in an adjacent building a 125 room NYX hotel is being created.
European acquisitions
On the European mainland, additions include the Hotel Cicerone in Rome, which is to be refurbished to become NYX branded, the group’s eighth hotel in Italy. And a first French acquisition was the Prelude Opera Hotel. A portflio acquisition in Austria at the end of 2023 added eight hotels there, while in Spain there have been acquisitions in Ibiza, Madrid, Mallorca and San Sebastian.
Fattal transformed its presence in the UK and Irish markets in 2017, when it teamed up with hotel landlord Pandox to acquire the Jurys Inn hotel business. The arrangement saw Pandox acquire the property assets, while Fattal took hold of the operating platform. That deal added 35 hotels to the group’s portfolio, with the Jurys Inn brand subsequently swapped to Leonardo.
