Hotel specialist Pro-Invest is planning to invest A$500m (€324m) in distressed hotel assets via a newly launched Asia-Pacific fund.

With co-investments and leverage, the value-add Pro-invest Asia-Pacific Distressed Hospitality Fund III will have substantially more purchasing capacity than its two predecessor funds to acquire hotels.

The fund has already identified a pipeline of assets, mostly located in Australia, New Zealand and Japan.

Pro-invest managing partner, Sabine Shaffer, told IPE Real Assets: “We call it a distressed fund because it is a buzzword, but really we are selectively looking to purchase standing and income-producing assets.”

“There is fairly good demand (from investors) in the market, with lots of money being raised in Europe and the US trying to get into the hotel space,” she said.

“In this extremely low-interest-rate environment, people are hungry for yield, and the type of products we offer can deliver 18-20% internal rate of return adding value to the assets.

“We are not expecting 50-cent-in-a-dollar sales as we saw for some opportunities in the US last year. But we do believe there are going to be more motivated sellers in the coming months.”

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