Hyatt to sell Playa's real estate portfolio for US$2 billion
Hyatt had entered into a deal to buy Playa, which operates 24 high-end, all-inclusive resorts across Mexico, Jamaica and the Dominican Republic, for $2.6 billion including debt in February.
Following the sale of the portfolio, which includes 15 resort assets, Hyatt's net purchase price for the remaining of Playa's business is about $555 million, the company said. The real estate deal, subject to regulatory approval in Mexico, is expected to close before the end of 2025.
'The rapid sale of the real estate from the transaction is likely to be taken positively by investors,' said Richard Clarke, analyst at Bernstein.
Hyatt, in a filing with the U.S. securities regulator, disclosed that its purchase of Playa was completed on June 17 and it entered into the deal with Tortuga on June 29.
Hyatt and Tortuga, concurrent with the portfolio sale, will enter into 50-year agreements for certain properties under which Hyatt will continue managing the resorts.
Thirteen of the 15 properties follow terms consistent with Hyatt's existing management fee structure, while the remaining two properties fall under separate deals.
Hyatt operates on an asset-light model, where the hotel chain prefers not to own physical properties but to manage or franchise them.
'The planned real estate sale to Tortuga transforms the acquisition of Playa into a fully asset-light transaction and increases Hyatt's fee-based earnings,' Hyatt CEO Mark Hoplamazian said in a statement.
Hyatt said it expects its asset-light earnings mix could reach at least 90 per cent by 2027.
It expects to use the proceeds from the latest deal to repay the loan used to fund a portion of the Playa acquisition.
(Reporting by Aishwarya Jain in Bengaluru; Editing by Shailesh Kuber)
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