Patron Capital and Invesco Real Estate are selling a hostels operator and portfolio to Queensgate Investments for €450m.

Private equity manager Queensgate Investments’ Fund II will buy the Generator Hostels operating company and a portfolio of 14 assets.

The deal is expected to close in May.

Generator Hostels, held in Patron Capital’s Fund III, owns 14 assets in London, Paris, Copenhagen, Amsterdam, Miami, Dublin, Hamburg, Barcelona, Berlin, Stockholm, Madrid, Venice, Berlin and Rome.

Patron Capital bought the portfolio, which generates €70m in revenue, for its third fund in 2007. Invesco then payed €60m for a 23% stake in 2014 along with WL Ross & Co and Invesco Fixed Income.

Keith Breslauer, Patron Capital managing director, said: “Generator has performed strongly under Patron’s ownership, during which time we have expanded the business significantly from just two hostels to 14, and have redefined the hostel concept into the design-led hospitality experience that today’s guests want.”

Queensgate Investments said it intends to own the portfolio for the long term and enhance operations for customers, with plans to invest €300m into adding more hostel assets.

Jason Kow, chief executive of Queensgate Investments, said Generator Hostels represents “high-quality freehold assets, robust revenues, an attractive lifestyle brand, and material scalability opportunities”.