Investment group Westmont Hospitality has signed a partnership with Spanish real estate company Grupo Lar, aiming to acquire and upgrade select service hotels in key city markets.
The pair aim to exploit a structural opportunity in the Spanish hotel market, where international hotel brands have yet to make the inroads seen in some other European countries. Many hotels remain in private hands, and are operated by family owners, or under local brand names that have limited national and international brand reach. Already, there are moves under way to shift more hotels into operation under international brands, boosting performance and investment returns.
Building a Spanish hotel portfolio
Initially, the two partners have targeted developing a portfolio of around a dozen hotels with circa 2,500 rooms, equating to a likely investment spend of EUR350m. The aim is to work with other investment partners who may wish to come on board and see their capital deployed for the same ends.
Westmont is no stranger to investing in hospitality assets. It owns and often also operates a range of hotels, having relationships with major brand groups including Marriott, Hilton, IHG, Hyatt and Accor. In Spain, it already has direct exposure to the market with a stake holding in growing hotel group Room Mate, alongside co-investor Angelo Gordon.
Grupo Lar is a broad-based real estate developer and manager of property across Spain. In more than 50 years of business, the group has invested across Europe and in America, and specialises in working with investment partners. The group has its main focus across residential, retail, healthcare, offices and logistics properties. In recent years, the company has invested in Spain, Brazil, Mexico, Peru and Poland. It previously invested in the hotel space with the development of the NH Abascal hotel in Madrid, in 1998.
In recent years, Grupo Lar has not invested in the hotel sector. However, in mid 2024 CEO Miguel Angel Pena told the Spanish media he was once again looking at hospitality in Spain, and also eyeing the potential of the student accommodation market in Poland. At that point, no investment partners had committed to share the company’s vision.
And colleague Javier Camara explained in an interview: “Within our strategic plans for the period 2024-2029 we are attentive to any segment where we believe we can add value – and in this case we are looking again at the hotel sector.”
Exploiting a sectoral opportunity
In 2023, the country welcomed a record 85 million tourists, with the figure expected to run higher in 2024. Grupo Lar says it sees a polarisation in the hotel market, with luxury and limited service hotels performing strongest.
Speaking of the latest agreement, Pena commented: “We are very pleased to partner with Westmont Hospitality on this ambitious project. Their experience in operational hotel management and our real estate development capacity creates an absolute synergy for this type of investment in a sector with great potential in Spain.”
