CBRE Global Investment Partners (CBRE GIP) and Pygmalion Capital Advisers have joined forces to invest in hotel assets and businesses across Europe.

The $22.8bn (€20.23bn) manager CBRE GIP and the opportunistic hotel investor Pygmalion said they have established a ”programmatic venture”. European Hotel Venture will own and reposition special situation assets.

The newly launched venture has acquired, through a non-performing loans (NPL) transaction, a portfolio of nine four-star regional city Hotels in Spain. The portfolio was previously owned by the Urvasco construction group.

The portfolio includes 1,650 hotel rooms which are located in Seville, Madrid, Bilbao, San Sebastian, Santander, Tenerife, Valladolid and Ciudad Real.

Silken Hotels will operate the assets under a long-term agreement and the venture will implement a comprehensive refurbishment programme.

Alexander van Riel, the head of continental Europe for CBRE GIP said:” We have entered the Spanish hotel market for the first time acquiring what is a sought-after portfolio. The transaction is in line with our global strategy to establish scalable, programmatic ventures with sector specialists.

“We will unlock value through selective value add projects while at the same time benefitting from a stable and secure income stream. Over time additional investments will be sourced and we will also be looking at hotels with indexed leases.”

Christophe Beauvilain, a founding partner of Pygmalion Capital Advisers, said: “This joint venture underlines our view that a significant opportunity exists to acquire, at attractive valuations, a pan-European portfolio of Hotel assets and businesses by exploiting special situations generated by the significant European NPL market.

“The combination of European banks still saddled with large NPL exposures and numerous debt funds that have been actively buying NPL books provides a large source of attractive deal flow for our specialist strategy. The Silken portfolio provides us with a strong basis for rapid expansion in the Spanish market given our fast-growing pipeline of investment opportunities.”