Canadian pension investment manager Public Sector Pension Investment Board (PSP Investments) and global investment group Eurazeo have teamed up to invest up to €300m in European hotel assets.

The duo will invest equal amounts in the new partnership which has already agreed to buy FST Hotels - a Spanish hotel group that owns and operates an 800-room portfolio across five hotels, primarily located in Madrid and Barcelona.

The hotel group, operating under the Ayre brand, will be acquired from Grupo Empresas Matutes and El Corte Inglés.

The investors said the hotels will undergo refurbishment, repositioning and rebranding to take full advantage of the anticipated hotel industry recovery following the COVID-19 pandemic.

Renaud Haberkorn, managing partner of real assets at Eurazeo said since establishing Eurazeo’s real estate arm in 2015, the firm has invested almost €900m of equity from its balance sheet in real estate opportunities targeting properties and companies with underlying real estate assets across Europe.

“Exits to date have delivered strong performance and, with our proven track record, we are now looking to invite like-minded third-party partners to invest alongside us in a pan-European opportunistic real estate investment program.

“We are thrilled to welcome PSP Investments as our first partner in a dedicated hospitality partnership, as part of this program.”

Stéphane Jalbert, managing director and head of Asia-Pacific and Europe real estate investments at PSP Investments, said: “We anticipate the hospitality sector in Europe will present an attractive recovery play as travel resumes and, together with Eurazeo, are working to capitalize on this opportunity.

“We are excited to have established this new partnership with Eurazeo - with their proven expertise in the hospitality sector - and look forward to exploring further investment opportunities together.”

To read the latest edition of the latest IPE Real Assets magazine click here.