Real estate manager Redevco 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 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 an 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 JV partner, before expanding into a pan-European hotel vehicle with a target €500 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the strong sustainability and social returns that can be achieved through repurposing architecturally interesting but outdated buildings and upgrading their environmental footprints.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.
What they said
Israel Casanova, managing director global transaction management at 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 professionalising 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 travellers that are increasingly seeking out authentic, high quality yet affordable experiences.”