MUNICH—Düsseldorf, Germany-based 12.18. Group and Kempinski Hotels S.A. revealed the launch of their luxury lifestyle concept—7Pines Kempinski.
Jörg Lindner and Kai Richter, managing partners of 12.18. Investment Management, together with Martin R. Smura, CEO and chairman of the board of Kempinski Hotels, unveiled the strategic alliance at the Expo Real, a real estate trade fair in Munich.
“The Kempinski brand has stood for tradition and excellent hospitality for more than 120 years. This represents an important step in our growth strategy,” said Smura. “Thanks to the cooperation with 12.18., we will be able to offer our guests a lifestyle concept of the highest standard in the future.”
The Kempinski Group is focusing on international expansion as part of its strategic planning. Europe’s oldest luxury hotel chain expects to have more than 100 luxury hotels in operation around the globe by 2021. In the next 12 months alone, nine new hotels with a total of 1,961 rooms and suites will open their doors: three of them in the Caribbean and one hotel in Tel Aviv, Israel; Tbilisi, Georgia; Bangkok; Guangzhou, China; Brazzaville, Congo; and Almaty, Kazakhstan; respectively.
As Europe’s oldest luxury hotel group, Kempinski Hotels has 78 hotels in 34 countries. The 12.18. Group has made a name for itself in recent years as an investor, project developer and in the modernization of hotels and restaurants. As an expert for high-class investments in the hotel and holiday real estate sector, the 12.18. Group offers investment, development and hotel management from a single source. The company’s flagship is the 7Pines Resort on the West Coast of Ibiza, which opened last year.
The initiator of this agreement was Carsten K. Rath, chairman of the advisory board of 12.18. and former Kempinski manager, who made this partnership possible. 7Pines Ibiza will reopen in spring 2020 under the name 7Pines Kempinski Ibiza, followed by another resort in Sardinia, Italy. In addition, Markus Lück, GM of the 7Pines Resort Ibiza for many years, will act as managing director.
In addition to its know-how in managing first-class luxury hotels, 7Pines also benefits from access to the international network and the extensive distribution channels of Kempinski Hotels. To promote the expansion, 7Pines Hotel Management Gmbh has been founded and is based in Düsseldorf.
With the development of 7Pines Kempinski, 12.18. wants to grow by 20 new hotels and resorts by 2022 and, in cooperation with institutional investors, place 500 million euros ($551 million dollars) in investment capital. As part of the expansion course, 12.18. is also expanding its portfolio outside Europe for the first time with the acquisition of the San Carlos Hotel in New York City. After thorough renovations, the San Carlos Hotel will operate as the 7Pines Kempinski Manhattan.
The strategic orientation of the Kempinski Group’s expansion in the future will not only be based on management contracts, but the acquisition of hotel properties. In particular, properties that may be extensively renovated and then repositioned under the group’s own brands will be favored. To date, Kempinski is purely a hotel operator—only the deluxe hotel on Maximillianstrasse in Munich, the Hotel Vier Jahreszeiten Kempinski, is owned by the company.
“By acquiring real estate, we benefit from the increase in value instead of paying money for management contracts,” said Smura. “We have set ourselves ambitious goals to expand the portfolio of Kempinski Hotels with additional flagship hotels. This selective growth is focused on acquiring highly regarded hotels that will make a valuable contribution to our brand. We therefore select only those hotels that meet our brand values and thus the highest quality standards of our guests.”
“The acquisition of the first property in the U.S. represents a milestone in our company’s history,” said Lindner. “New York has always been a dream destination for Kempinski Hotels and this important partnership makes it a reality,” Smura continued. “Kempinski is now represented in New York and at the heart of Manhattan and we look forward to welcoming the first guests to this vibrant metropolis.”