The European investment management firm, Redevco, has chosen Iberia to enter the hotel market with 6 assets worth over €80 million. The investments in Lisbon, Bilbao, Seville, Porto and Málaga are to seed the launch of Redevco’s ‘Next Gen Stays’ joint venture platform.
The intention is to initially build a €250 million portfolio in the Iberian markets with a like-minded JV partner, a specialist boutique hotel operator, before expanding into a pan-European hotel vehicle with a target €500 to €700 million investment volume.
The European retail specialist has found common consumer drivers between retail and hotel markets observing an investment outperformance in both property sectors in urban centers which score highly in Redevco’s European City Attractiveness research framework. This research has guided the manager’s restructuring strategy over the past decade of its previously mainly retail investment portfolio.
The Next Gen Stays investment strategy is targeting a net levered IRR of 15%+ over a five-year period. Redevco is acquiring strategically located under-exploited real estate with local character and redevelopment potential. The assets are pre-leased to a professional operator at the time of acquisition, and will be redeveloped to ‘create authentic, sustainable, good value accommodation’.
Israel Casanova, Managing Director Global Transaction Management Redevco, said: “By marrying Redevco’s strong retail and urban regeneration real estate investment track record with best-in-class hotel operators, our Next Gen Stays strategy plays to the latest upcoming travel and consumer trends.”
“The vast online ‘sharing economy’ market that Airbnb identified and opened-up is now professionalizing in a more community-focused way. Our Next Gen Stays hotels form a distinct market sub-segment to target the younger, tech savvy and sustainable travelers that are increasingly seeking out authentic, high quality yet affordable experiences.”
Herman Jan Faber, Co-Head Client and Fund Management, added: “We think that it is much more sustainable to convert existing buildings and make them as sustainable as possible, rather than knocking them down and building new – given the inherent embedded carbon footprint.”