A third partner joins the line-up
Spanish financial institution Renta 4 has chosen to join the alliance formed by Westmont Hospitality and Grupo Lar. The alliance aims to launch a platform of hotels positioned in the select service segment. The joint venture plans total investment of around €350 million over the next three years.
(*) What is a “select service” hotel? | A select service hotel sits between the budget hotel and the full-service hotel. It offers good-quality rooms, often in the midscale category, but deliberately scales back ancillary services: little or no à la carte dining, no room service, few or no meeting spaces and no spa. Guests will generally find breakfast, a bar or “grab & go” area, a fitness room and a multi-purpose lobby that doubles as a workspace. For an investor, the appeal is economic. Fewer services mean smaller teams, a lighter payroll and limited non-revenue-generating floor space. The share of revenue derived from rooms is therefore very high, and operating margins are generally better than in full service. These assets are also easier to standardise and replicate, which explains their success with platforms seeking to build a portfolio quickly, such as Westmont, Grupo Lar and Renta 4 in Spain. The concept originated in the United States, where brands such as Courtyard by Marriott, Hilton Garden Inn, Hyatt Place and Holiday Inn Express are the benchmarks. In Europe, brands such as Moxy, Motel One and certain Novotel and Mercure hotels are often placed in this category, although the boundaries are less clear-cut.
Each partner brings distinct expertise. Westmont Hospitality contributes its experience as a hotel operator, Grupo Lar its real estate development expertise and Renta 4 its financial capacity. The partners present this division of roles as the cornerstone of the project.
Twelve hotels and 2,500 beds targeted in Spain
The funds are intended to finance the acquisition of 12 hotels in locations considered strategic within the Spanish market. Together, they will total 2,500 beds. The partners have set a five-year exit horizon for the operation.
The properties will combine the streamlined level of service characteristic of select service with environmental, social and governance (ESG) commitments. According to its backers, the project responds to demand for this type of hotel. The segment continues to attract capital in a very active Spanish market, as illustrated by the recent acquisition by SCPI Atream Hôtels of its first hotel on the Costa Blanca.
Málaga, the platform’s first deal
The platform has already completed its first transaction. It acquired an office building in central Málaga for €23 million, which will be converted into a hotel. The property extends over 3,833 m² and will have 116 rooms.
This deal marked Renta 4’s first financial participation alongside Lar and Westmont. At the time, the firm launched a dedicated investment vehicle, Renta 4 Hospitality I, with a minimum ticket of €100,000.
Barcelona in the pipeline at Sant Adrià de Besòs
The partners are already working on a second operation on the outskirts of Barcelona, with target capital of €38 million. The project is based on the acquisition of a plot of land in Sant Adrià de Besòs. The partners plan to build a 225-room hotel there, spanning 7,344 m².
The Catalan capital is attracting several international operators in the economy and midscale segments. MEININGER is one example: the group is targeting nine new hotels in Spain after a first summer in Barcelona.
THT Analysis – With this three-partner structure, the operator, the developer and the “capital provider” are brought together within a single vehicle. Capital will be deployed over a short timeframe, which brings the platform closer to a serial roll-out model. The next step will be to turn the announced pipeline into identified assets beyond Málaga and Barcelona.
Leadership banks on accelerated growth
Renta 4 chairman Juan Carlos Ureta highlighted his group’s interest in the Spanish hotel market. He described Westmont and Grupo Lar as top-tier partners and leaders in their respective sectors.
It is worth recalling that Miguel Ángel Peña has just taken over as chief executive of Grupo Lar. In his view, Renta 4’s arrival strengthens the project’s financial solidity and makes it possible to accelerate the platform’s growth plan. For its part, Westmont Hospitality sees it as reinforcing the partners’ shared bet on the select service segment.
At a glance by The Hospitality Tribune
Renta 4 joins Westmont and Grupo Lar’s Spanish select service platform
Target investment of around €350m over the next three years
Pipeline of 12 hotels totalling 2,500 beds across Spain, five-year exit horizon
First deal: €23m office-to-hotel conversion in central Málaga, 116 rooms, 3,833 m²
Second project: land acquisition in Sant Adrià de Besòs (Barcelona), 225 rooms, €38m target capital
Roles split between operator (Westmont), developer (Grupo Lar) and capital provider (Renta 4)
