Spanish hotel chain Meliá Hotels International has agreed to sell seven of its largest resort assets in Spain to US opportunity fund Starwood Capital for €176m.

Spanish hotel chain Meliá Hotels International has agreed to sell seven of its largest resort assets in Spain to US opportunity fund Starwood Capital for €176m but will continue to manage them under its Sol Hotels brand.

The seven hotels have 2,933 rooms and include the Sol Príncipe in Malaga, the Sol Lanzarote and Meliá Gorriones in Fuerteventura, Canary Islands, the Sol Ibiza and Sol Pinet Playa in Ibiza, and the Sol Mirlos and Sol Tordos in Mallorca. The assets will be held in a joint venture 80% owned by Starwood and 20% by Melia, subject to EU merger control clearance and final financing approval, Melia said in a release. The partnership will invest around €30m to renovate them and strengthen the Sol Hotels brand over the next two years. It will also seek to integrate more hotels owned by Meliá or third parties, with the hotel chain saying it is committed to reducing debt and becoming 'asset lighter.'

Meliá said the deal will give it a far healthier balance sheet to support growth over the next three years. "Meliá's strategy is succeeding in enhancing our leadership in hotel management, while also favouring the strategic growth we plan for our brands worldwide .. supported by a select number of major JV partnerships such as the agreement with Starwood Capital," said Vice Chairman and CEO Gabriel Escarrer.

Jorge Ruiz, Head of CBRE Hotels Spain, which advised the buyer, commented: “The JV agreement .. reflects the extraordinary performance of the main Spanish tourist destinations. This transaction also proves that the Spanish hotel market continues to be one of the most attractive .. as Spain is the 3rd top world tourist destination”. Melia estimated that on completion of the deal the value of properties in multi-property partnerships will be around €800m. The firm operates over 370 hotels in more than 40 countries.