After Prodea, Castlelake buys stake in Spain's MHRE

Alternative investment manager Castlelake has announced that it will acquire up to 49.9% of the shares of Millenium Hotels Real Estate (MHRE), a listed real estate investment company that specializes in luxury hotel properties in Spain and Portugal.

Castlelake, the owner of Greece’s largest real estate investment company (REIC) Prodea, said that the deal will allow it to expand its exposure in southern Europe.

Castlelake's investment in MHRE builds on the firm's history of investing in Europe, where it has acquired more than 7,000 assets across 12 European countries since its founding in 2005, it said in a statement.

Castlelake's experience investing in Spanish land and real estate includes the acquisition of fully-permitted land following the global financial crisis and later establishment of Aedas Homes, which is now one of the largest Spanish housebuilders with nearly 2,000 units delivered in FY21, it added.

Through the transaction, Castlelake will become the primary shareholder of the company and have three seats on its board of directors.

"Through our investment in the Millenium platform, we aim to enable Castlelake's investors to obtain exposure to high quality assets in prime Spanish locations while opportunistically participating in the tourism sector's recovery from the COVID-19 pandemic," said Evan Carruthers, Managing Partner and Chief Investment Officer of Castlelake.

"With substantial experience in the Spanish market and Europe more broadly, we believe Castlelake is uniquely positioned to support Millenium's business plan and help it achieve its strategic goals," added Carruthers.

Javier Illán, president of Millenium Hotels Real Estate added, "Castlelake's support provides Millenium with a strong foundation on which to build momentum and maximize the creation of value for shareholders."

The Millenium portfolio is currently comprised of 10 hospitality assets across the main tourism destinations of Madrid, Alicante, Sevilla, Bilbao, Córdoba, Alcaidesa and San Sabastian, which Millenium has stated to be valued at approximately 500 million euros, once fully redeveloped.