STA, 16 June 2022 - Slovenian real estate fund Equinox will transfer management of three hotels in the centre of Ljubljana, among them the iconic Grand Hotel Union, to Spanish group Grupo Hotusa for 20 years with the option of two five-year extensions, its executive director Matej Rigelnik told the press on Thursday. The deal is worth at least EUR 100 million.
The Spanish group will manage Grand Hotel Union, Hotel Lev and uHotel, with Exqinox entitled to a minimum rent regardless of how well they do, which translates into more than EUR 100 million in 20 years. The contract also sets down a variable part of the rent which will depend on revenue growth, Rigelnik said.
Equinox was incorporated in May 2021 with the split of the real estate branch from Union Hoteli Group, which runs the three hotels and has been renamed Union Hotels Collection.
Concluding the deal with Grupo Hotusa, Equinox "has set itself on the path of a proper real estate firm", Rigelnik said.
"We're aware that the current ownership structure of Union Hotels Collection and Equinox, where we have practically the same corporate management, entails a significant conflict of interest, which will be eliminated with the management of these properties being transferred on to a foreign strategic partner."
He believes this will have a positive impact on Equinox's value.
He said the business model they pursue is well known in the West, where owners, investors, operators and brands are not under the same umbrella. A clear division is important because there are specifics in managing property or operating a company, he stressed.
Rigelnik finds this business model more sustainable, and at a time of a complex macroeconomic situation, such as the war in Ukraine or inflation, also less risky.
Equinox will generate income from rents, with the difference between rents and costs to be paid to shareholders in the form of dividends.
Rigelnik was however more reserved when talking about Union Hotels Collection, saying only that the Spanish group will take over its employees.
Clara Lopez Sanjurjo from Grupo Hotusa said the group had more than 40 years of experience in various segments of tourism.
Its hotel management business, Eurostars Hotels, was founded in 2005, has 5,000 staff and manages 235 hotels in 17 countries on five continents, the three Slovenian hotels excluded.
It is the leading hotel chain in Spain and the ninth in Europe, she said, adding that one of the reasons they had chosen Ljubljana was its history and the location at the heart of Europe, a developing economy, its increasing popularity among tourists, as well as safety and favourable environmental parameters.
Given the group's appreciation of the cultural heritage of cities and hotels, she said they will keep the name of Grand Hotel Union, which opened back in 1905.
Following the news conference, trading in Equinox shares resumed on the Ljubljana Stock Exchange after it was suspended on Wednesday.