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The owners of boutique hotel chain CitizenM are working with bankers to explore options for the business, including a potential sale, as it seeks to expand following a rebound in the travel sector post-pandemic.
Netherlands-based CitizenM’s owners including its largest shareholder Dutch pension provider APG, Singaporean wealth fund GIC and founder Rattan Chadha are being advised by Morgan Stanley and the real estate-focused advisory Eastdil Secured, according to people familiar with the matter.
GIC took a 25 per cent stake in CitizenM five years ago in a deal that valued the business at €2bn including debt. The company’s value had increased since then and it could now be worth roughly €4bn in a deal, one of the people said.
Deliberations were at an early stage and the company could also pursue the sale of a minority stake, one of the people said, cautioning that no final decision had been taken yet.
The company is exploring options to raise money from institutional investors to drive its continued expansion, as well as potentially allow for some existing investors to monetise their shareholdings.
When GIC bought into the company, CitizenM had 15 hotels. That number has since more than doubled and the group now has more than 40 locations and 10,000 rooms across North America, Europe and Asia.
The company currently has hotels under development in Boston, Miami and Dublin, according to its website. It claims it has higher profitability per square metre than other hotels because of its brand, design, centralised technology operations and standardised construction with rooms being prefabricated and shipped to the construction site.
Businesses in the travel and hospitality sectors have returned to dealmaking after the pandemic, following a travel boom last summer in Europe despite rising hotel and flight prices.
Saudi Arabia’s Public Investment Fund bought a 49 per cent stake in Sir Rocco Forte’s luxury hotel group in December with plans to double the chain’s size over the next five years with new hotels in the Middle East, Italy and the US.
Rattan Chadha, who is the company’s executive chair, started CitizenM — the “M” stands for “mobile” — in 2008 with specifically short-stay business travellers in mind.
The company was one of the first in a breed of micro hotels, alongside the likes of easyHotel and Yotel, which offer smaller rooms but larger meeting spaces and lobbies.
CitizenM, Eastdil, APG, GIC and Morgan Stanley declined to comment. Chadha’s investment group KRC Capital did not immediately respond to requests for comment.
