UK’s Catalyst Capital Acquire Diplomatico Hotel, Lisbon

Main Photo: The Diplomatico Hotel

Date: August 2021

Name: The Diplomatico Hotel – opening 2023 as Wilde Aparthotel by Staycity Lisbon

Location: Rua Castilho, Pero Pinheiro, Lisbon, Portugal

Number of Keys: 95

Seller: An un-named Family Office. Originally completed in 1969, Hotel Diplomático has never been traded, and has been held in the same ownership for its 52 years. Bond Advisory advised the transaction on behalf of the sellers.

Buyer: Real estate investment firm Catalyst Capital has bought the former Hotel Diplomatico in Lisbon from a family office for €14.75 million on behalf of its Catalyst Core Plus European Property Fund (CCPEPF).

The London-based company will invest around €9 million to refurbish the property, creating a 95-room, 4-star boutique hotel. The hotel will be operated by Staycity, the aparthotel operator, under its premium Wilde Aparthotels.

The company has signed a 25-year lease with annual, inflation-linked rent uplifts. Catalyst expects to begin the refurbishment next year and complete it in 2023.

The deal is part of Catalyst’s new €250 million hotel investment programme, which will target properties in gateway European cities with high barriers to entry and limited competitive supply, which can be transformed into 4 and 5-star tourist hotels with pre-lets to established operators or management contracts.

Kean Hird, partner of Catalyst Capital and the fund manager of CCPEPF, said: “We believe there is a compelling opportunity to deliver a series of tourist hotels in European Capital city centres as demand rebounds and performance recovers, with a full recovery in hotel demand expected to return across Europe by 2023.

Diversification in the fund’s assets across different sectors, asset classes and geographies has served us well during Covid. Global travel was temporarily interrupted by the pandemic, and Europe is the global leader in international tourism. Leisure-led domestic and international travel is laying the foundation for recovery across Europe, as the preference for leisure experiences increases post-Covid”.

“Catalyst Capital is an industry leader, and we are happy to have collaborated with them on such a significant transaction,” adds Ricardo Videira, Co-Founder of Bond Advisory.

“All parties were determined and patient; allowing this transaction to be concluded in spite of the pandemic,” says Nuno Marques Ribeiro, CEO of Bond Advisory. “The understanding of the intricacies of the Portuguese market for investors is becoming a fundamental factor in the success of a transaction. Finding and structuring deals is becoming more challenging – with a great number of assets still owned by individuals and families – making it decisive and necessary for the advisors involved to have an incisive approach from the beginning and Hotel Diplomático was as an example of this in practice.”

Price: €14.75m plus €9m to refurb

Price per Key: €155,263, or €250k with refurb cost

THPT Comment: Congrats all-round, not least of all the price. Staycity now span 20 aparthotels across 11 cities and two brands — Staycity Aparthotels, and their new premium brand, Wilde Aparthotels by Staycity.

First Seen: Europe Real Estate

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