Less than 10 months before the Open Championship returns to the “Home of Golf” one of St Andrews’ most prestigious hotels has changed hands for more than £32m.
Earlier this year the 209-room Fairmont Hotel was offered for sale at £37m with owners SABD Holdings (UK), a subsidiary of American private equity firm ARES, wanting to retain control of the resort’s two international golf courses. Now, investment fund Kennedy Wilson Europe Real Estate has stepped in to acquire the entire 520-acre package for five-million pounds less than the asking price.
Recently named 2014 “Property Fund of the Year”, the purchase is Kennedy Wilson’s second luxury hotel deal of the summer. In June it acquired Dublin’s Portmarnock Hotel for £23.9m.
In a statement the fund described its Scottish buy as offering “a number of exciting asset management and value-add opportunities for both further strategic investment and capital expenditure, including upgrades to the club house and other amenities within the hotel”.
The St Andrews Fairmont Hotel — which hosted the 2006 Northern Ireland peace talks — comes with conference facilities, two four-bed manor houses, a fitness centre and spa, as well as numerous bars and restaurants. It also has two 18-hole golf courses, including the 7,230 yard Torrance Course.
Originally designed by golfer Gene Sarazen and former European Ryder Cup captain Sam Torrance, the championship course was the final qualifying venue for the 2010 Open Golf Championship. The hotel is now fully booked for next year’s St Andrews’ Open.
Kennedy Wilson’s president and chief executive is Mary Ricks. “As a high-quality and well-managed hotel, this is an excellent addition to our portfolio,” she said. “It also provides a number of good opportunities to leverage our extensive asset management expertise through which we expect to be able to add significant value over the medium term.”
The St Andrews hotel will continue to be run by Fairmont which has a management agreement until 2031. It has similar contracts to manage the iconic Savoy Hotel in London and the Plaza in New York.
When it attempted to sell the Fife hotel this spring SABD Holdings stressed the disposal was unrelated to the business’s £12.8m pre-tax losses for 2012. The year had actually produced a gross profit, the company claimed, but this had been wiped out by a £10.6m “impairment charge” on the value of the property, and other adjustments.
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