European hostel chain A&O Hostels, owned by StepStone Group and Proprium Capital Partners, has acquired two hotel assets in central Manchester, from Ares Real Estate funds and EQ Group.
While it did not disclose the purchase price, A&O stated it intends to carry out an £8.2m (€9.4m) refurbishment of the properties to provide 1,218 beds across 303 rooms. The four-storey, adjoining hotel assets are located in a prime city-centre location between Deansgate and Piccadilly.
StepStone and Proprium sponsored the €800m management-led acquisition of A&O at the end of 2023 and together they have invested about €500m into the platform’s expansion over the past 18 months.
Recent acquisitions include assets in London, Brighton, Brussels, Antwerp and Heidelberg, as well as the Schulz Hotel platform, while a near-term pipeline of further transactions in other European cities “continues to be progressed”, A&O said.
Oliver Winter, CEO of A&O Hostels, said: “As one of the UK’s best performing hotel markets outside of London, attracting over 1.9 million visitors annually, we have long regarded Manchester as a key strategic target, and are therefore really pleased that we can now establish a significant footprint through this freehold acquisition.
“The transaction concludes a highly successful year for A&O Hostels which has seen us deliver around 5,500 new beds across four new cities, as well as bring the Schulz Hotel platform into our group.”
Founded in 2000 by Winter, A&O Hostels achieved an occupancy rate of 73% across its hotel portfolio in the first half of 2025, the company said.
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