Redevco, one of Europe’s largest privately owned urban real estate managers, has entered the European hotel market with the acquisition of six assets across Spain and Portugal for more than €80 million.
The investments in Lisbon, Bilbao, Seville, Porto, and Malaga are to seed the launch of Redevco’s Next Gen Stays joint venture platform. The goal of the strategy is to capitalize on the post-pandemic resurgence and growth in the youth tourism and experience travel market and aggregate a professionally managed portfolio in a sector that is evolving and expanding rapidly. Next Gen Stays fits Redevco’s strategic focus on creating vibrant places in dynamic urban locations and thereby helping cities to become more livable and sustainable.
The Next Gen Stays investment strategy is targeting a net levered IRR of 15%+ over a five-year period. Redevco is acquiring strategically located underexploited 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. The intention is to initially build a €250 million portfolio in the Iberian markets with a like-minded joint venture partner before expanding into a pan-European hotel vehicle with a target €500 million to €700 million investment volume.
The strategy is also targeting the strong sustainability and social returns that can be achieved through repurposing architecturally interesting but outdated buildings and upgrading their environmental footprints. The completed refurbished hotels will be compatible with Redevco’s mission of making its entire real estate portfolio net carbon neutral by 2040.
Source: https://irei.com/news/redevco-enters-european-hotel-market-e250m-strategy/, on 13 October 2022