The sale last week by NH Hoteles to Invesco Real Estate’s second hotel fund marks ongoing efforts by the group, now under new leadership, to fulfil plans to sell Eu300m of non-strategic assets.
The move to complete one strategy comes as Invesco, which recently had its first close for the second fund, makes its first acquisition from it. The Eu168m sale and leaseback deal is in keeping with those done for its first fund, which looked at mid-market hotels in strategic locations near city centres, airports and convention centres in the euro zone.
The NH portfolio of five hotels across Germany and Austria in Munich, Hamburg, Frankfurt, Vienna and Salzburg long-let on what Invesco described as 25-year "hybrid" leases. Marc Socker, director – Hotel Fund Management at Invesco Real Estate who led the transaction, said: "The locations of the portfolio represent some of Europe’s best performing hotel markets, which are expected to benefit from strong growth, in our view."
Invesco Real Estate will hold further closings for its second pan-European hotel fund over the next 12 months and is currently analysing potential future investments in Paris, Lyon, Barcelona, Berlin and Glasgow.
When launching the second fund, Simon Redman, head of product management at Invesco Real Estate, said: "The branded hotel market is a growth sector and such hotels are more fundable, saleable and offer stable high income potential. With low brand penetration in Europe, this provides opportunities for consolidation within the sector and opportunities for institutional investors wanting to invest into this alternative real estate."
HA Perspective: Invesco’s five-site deal with Accor last year was one of the few portfolio transactions in the region and with portfolio transactions in Europe due to increase this year, according to consultants such as HVS London and Deloitte, there could soon be competition for the fund’s favoured assets.
With the new wave of European CEOs and NH Hoteles and Accor charged with accelerating their asset disposal strategies, it appears that both sides could achieve their objectives.