Singapore sovereign wealth fund GIC’s decision to buy a controlling stake in Sani/Ikos Group (SIG) is not only a massive boost to the company but also to the Greek tourism market in general.
The deal values the business at €2.3 billion and upon completion is expected to strengthen the resources available to deliver on a five-year investment plan worth of over €900 million.
SIG develops, owns and operates over 2,750 rooms and suites spread across 10 resorts in Greece and Spain. It also has ambitious expansion plan to not only grow the resort in Greece but elsewhere in Europe too.
“Greece has always been a strong summer destination but many locations struggled for accessibility and particularly airlift, but this now, all of a sudden, puts them on the map, in terms of being a potential all-year-round destination,” said Roger Allen, CEO of advisory firm RLA Global.
“These type and size of transactions - especially when backed by sovereign wealth – do have highly positive impacts on the wider spectrum of tourism with adding much more confidence in the destination and you need this crucial step to begin addressing all-year-round tourism. There'll be a bounce when it comes to airlift pushing the shoulder season, and the out-of-season period, with destinations that could work all-year-round. You cannot underestimate the value that an improved tourism infrastructure has on the market.”
Greece’s development and investments minister Adonis Georgiadis said the deal showed investors have confidence in the country.
"They know that if they invest their money, they will not lose but gain," he said.
GIC’s hospitality binge
In the last couple of years GIC has made a couple of notable hospitality acquisitions, showing its appetite for the sector.
In 2019 it bought a 25% equity interest in Netherlands-based CitizenM and just this year it agreed to buy a stake in The Student Hotel.
"This latest acquisition and the recent $900m deal at Aman Resorts shows that, despite concerns over consumer spending power, the luxury resort market is a safe haven,” said Alex Sogno, CEO of Global Asset Solutions.
“Sani/Ikos Group operates in established markets and is ripe for expansion in what is an increasingly inspiring segment of the industry. Key to delivering successful growth will be an eye for operational detail as the portfolio builds and guests rely on enjoying an exemplary level of service with every stay."