Hilton Hotels are working closely with Morgan Stanley Real Estate and have recently signed an agreement to sell up to 10 Hilton Hotels. The sale goes to a fund managed by Morgan Stanley Real Estate for approximately €566 million which is approximately US$770 million.
The finer points in the mega deal see Hilton and Morgan Stanley Real Estate agreeing upon long-term management contracts on five of the 10 hotels, including the Hiltons in Düsseldorf, Dresden, Paris Charles de Gaulle, Strasbourg and Zurich. Long term management agreements are expected to be established on the Hilton hotels in Brussels, Barcelona and Luxembourg subject to Hilton and Morgan Stanley Real Estate agreeing to capital plans. One of the deals includes the Los Zocos Club Resort in the Canary Islands this is unbranded Hotel and is being sold without an ongoing contract.
On completion of these transactions, Hilton will have sold over $3 billion of assets that it obtained in the acquisition of Hilton International in late February 2006, and over $4.5 billion of assets will have been sold since the company began its disposition program in 2005
Robert M. La Forgia, Executive Vice President and Chief Financial Officer of Hilton Hotels Corporation, commented on the proposed sale, “This transaction is a significant step for Hilton as we continue to focus on our strategy of growing our managed and franchise business, while reducing asset ownership and strengthening our balance sheet.
Morgan Stanley Real Estate is a highly respected real estate investor and an important business partner and currently owns or has an interest in 13 Hilton family hotels. This transaction builds significantly on this relationship and provides a platform for continued growth of our brands as we look expand our reach globally.”
