Marriott International Inc, the international hotel chain, has reportedly entered into an agreement to sell three of its 'Edition' boutique hotels located in Miami, London and Manhattan for $800 million, the company said in a news release, Friday, August 16.
Marriott has reportedly entered into a non-binding letter of intent to sell the hotels once they complete construction. However, the company will retain management of the hotels for the time being. All the three hotels are under construction now. According to the letter, the hotel in London will be completed next month and will be the first asset to be sold. The Miami Edition will be finished by the second half of 2014 and the Manhattan one sometime in 2015. Therefore, the deal will be completed only by 2015.
Though the buyer of the hotels was not announced, several media reports speculate that the Abu Dhabi Investment Authority (ADIA), a middle-eastern sovereign fund, has bought the hotels. The AIDA was started in 1976. The fund was created to invest on behalf of the Abu Dhabi government into various sectors. AIDA owns about 7 percent of the world's oil reserves.
Sometime back in February 2013, it was reported that the AIDA was looking to invest $992 million in 42 Marriott Hotels. The fund hopes to diversify into retail business with the purchase of the hotels. However, this particular deal alone is for around $800 million.
Marriott has been developing the 'Edition' brand with famous hotelier, Ian Schrager (of the Studio 54 fame). Each Edition hotel offers complete 'authenticity' and has 'a rare individuality'.
According to its Official Website:
The brand's unifying aesthetic is in its approach and attitude to the modern lifestyle, with exceptional design, the highest quality, character and originality, and impeccable service. With each hotel distinctive in its own right, EDITION is intended to push the boundaries, break new ground and take the hospitality industry into bold, uncharted areas - emphasizing solid design, extreme quality, originality and character, and delivering impeccable modern service that is environmentally responsible.
The Marriott group has made a steady recovery from the recession. It has benefited largely from the demand for comfortable hotel living from corporate travelers. According to MarketWatch, Marriott reported a 25 percent profit in its second quarter results. Though Marriott's stock has dropped 5.3 percent in the last three months, its shares went up 30 cents to $41.19 at after-hours trading.
