UNITED STATES - California Public Employees Retirement System is planning to tap into the tourism trade next year with the development of a global hotel investment platform.
Its global hotel idea is thought to be part of CalPERS' review of its total real estate portfolio and strategy, having earlier this month revealed it may increase its international real estate allocation from 20% to as much as 50%.
Consultants assisting the fund are thought to be considering recommending at least one hotel-only commingled fund with a global investment strategy as it is now believed there is "the right demand" for hotels internationally.
But CalPERS is also said to be looking at investing in hotels on a global basis through the creation of new separate account relationships, albeit no determination has yet been made as to what countries it may select as target markets or the capital allocated.
Assets may, in some cases, be used for new development projects as well as investing in the renovation of existing assets.
CalPERS already has an active real hotel investment program in the United States through commingled funds, the most recent of which was $200m (€148.2m) into the RLJ Real Estate Fund III.
Rob Kochis, principal at Townsend, suggests there are some good investment opportunities to be had in the global hotel markets.
"There are not enough new properties in the European market at present, so the best strategy would be to either renovate an existing asset or to build new properties. [Asia] is a region where, in many areas, there is no place to stay. So this creates a demand for new construction."