EUROPE - Investment in the European hotel sector shows signs of taking off as three French institutional investors acquire a €132.9m portfolio.
Jones Lang LaSalle reported that investment in EMEA hotels rose by 73% in the first half compared with the same period last year.
Soon after, AXA Real Estate Investment Managers announced that it acquired six Paris hotels from Foncière des Murs on behalf of an AXA Group insurance company, Caisse des Dépôts and Sogecap.
Meanwhile, UK-based hotel group MWB entered into a sale-and-leaseback transaction on four of its hotels, including London's Charterhouse Square, which was sold to German open-ended fund manager Deka.
Internos Real Investors, which poached hotel investment specialist Jochen Schaefer-Suren from Invesco at the beginning of the year, is also known to be looking to launch a hotel fund in future.
Invesco itself has continued to be very active in the hotel space.
The French joint venture transaction executed by AXA Real Estate is a visible vote of confidence for a sector that is historically very cyclical in nature.
Five of the hotels are located in Paris - with one in Brussels - and operated by Accor.
AXA Real Estate said it sourced the portfolio off-market and that it expected the deal to generate income, and that it would benefit from a recovery in the European hotel market, especially in the sector catering for business travellers.
Gael Le Lay, head of hotel investment at AXA Real Estate, said: "This commitment reflects AXA Real Estate's ability to source high-quality transactions off-market and then package them to meet the specific requirements of our clients and investors, who in this case are focused on a long-term income driven approach.
"Acquired without debt, the rents generated from the turnover-linked leases are expected to grow alongside an improving hotel market, which will deliver strong income growth, without the need for material capital expenditure on the assets."
The joint venture between three institutions also shows that club deals remain popular in the institutional real estate space.
Antoine Jozan, global head of investor relations and marketing at AXA Real Estate, said: "This deal also shows AXA Real Estate's ability to marry its expertise in sourcing transactions with an in-depth understanding of specific client requirements, which enables it to put together a group of like-minded investors in a joint venture that can act quickly to take advantage to these opportunities."
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