PGIM Real Estate and Madison Cairn, a newly formed division of Cairn Group, have created a joint venture to target the recovering UK hotel sector.
PGIM Real Estate is the US$209.3 billion real estate business of PGIM. Cairn is an integrated investor, developer and operator in UK leisure, with a portfolio of 33 hotels.
The joint venture will look to buy, develop and reposition hotels in the UK with a focus on domestic leisure demand, which has shown strong signs of post-pandemic recovery.
The joint venture’s first investment is in Brighton and more deals are in the pipeline.
After the initial strong performance of domestic tourism hotspots after the end of lockdown in 2020 and 2021, there was a thought that consumers would go back to their usual foreign holidays once restrictions eased. While numbers have increased to the likes of Spain and Portugal, rising inflation and the cost of living crisis may push people to staying closer to home – even if prices between domestic and foreign holidays are closer than they once were.
PGIM is the global asset management business of Prudential Financial and it ranks among the top 10 largest asset managers in the world with more than $1.4 trillion in assets under management as of 31 March 2022.
Madison Cairn develops, owns and operates a portfolio of real estate across the UK including 33 branded independent hotels, nine care homes and various residential projects.
What They Said
Charles Crowe, managing director and head of UK Transactions at PGIM Real Estate, said: “At PGIM Real Estate, we’ve been investing in Brighton hotels since 2013 and have tracked this opportunity for some time. We are delighted to be working with the Madison Cairn team, who are one of the most experienced operators in the sector. We share conviction that the prospects for selected good-value domestic leisure markets have strengthened in light of recent events, and we look forward to expanding our venture soon in locations such as these.”
Aneil Handa, director of Madison Cairn, said: “We are thrilled to announce this strategic joint venture with PGIM Real Estate. We are privileged to be working with one of the world’s largest real estate managers, in a partnership where our skills complement each other’s perfectly and position us well for our next chapter of growth in the sector. The acquisition of our first hotel together is a key milestone, with the joint venture having appetite for further expansion.”