GIC Secures 25% Stake in CitizenM

AMSTERDAM—CitizenM Hotels, KRC, APG, and GIC (the sovereign wealth fund of the government of Singapore) have signed an agreement where GIC will acquire a 25% stake in CitizenM, valuing the company at $2.3 billion.

From the start, CitizenM Hotels was capitalized by two shareholders: KRC Capital (the investment vehicle of entrepreneur Rattan Chadha), and APG (the largest Dutch pension investor on behalf of its pension fund clients). GIC will become CitizenM’s third investor. Both KRC and APG will continue to support the growth of the company by committing fresh capital. In total KRC, APG and GIC have committed to invest a further $847 million of equity for future expansion, which goes well beyond the current secured development pipeline, according to the company.

“We met with over 15 potential investors/partners,” Rattan Chadha, founder/executive chairman of CitizenM Hotels told Hotel Business. “GIC shared our values, and has global real estate and hospitality experience. Our plans are to continue growing the business by opening new hotels in our three main markets: Europe, North America and Asia. We have 20 hotels in our pipeline.”

The growth of the company is expected to further accelerate through the delivery of its secured development pipeline representing an additional investment in excess of $1.69 billion.

“CitizenM represents an attractive value proposition of affordable luxury in urban markets,” said Lee Kok Sun, chief investment officer of GIC Real Estate. “It is well-received by consumers who are increasingly placing value in experience and authenticity. As a long-term global investor, we believe this is a good addition to our overall portfolio of quality assets, and we look forward to partnering with the CitizenM management team to further add value to CitizenM as they expand globally.”

Robert-Jan Foortse, who is responsible for the European property portfolio of APG, added, “Eleven years ago, we supported Rattan Chadha when he created CitizenM. Together, we have been on an incredible and rewarding journey ever since. With this transaction, we achieve another milestone. We are very pleased to welcome GIC as an investor in CitizenM. We have successfully worked with GIC on many other occasions. With the increase in committed capital, CitizenM can further accelerate its growth strategy. We look forward to the next part of this exciting journey.”

Morgan Stanley & Co. International plc acted as sole financial advisor and Stibbe N.V. acted as legal adviser to CitizenM and its shareholders in connection with the transaction. HSBC Bank PLC, in their capacity as CitizenM’s global banking partner since 2010, has acted as general corporate lending advisor in the transaction. This transaction is subject to merger control clearance.