Internos Global Investors, the pan-European fund manager, has reached the first close of its second hotel real estate fund, securing equity of €133 mln from seven German institutional investors.
All but one of the seven investors had already invested in Internos’ first hotel real estate fund which reached €500 mln in assets under management.
'Hotel Fund II provides investors with access to value-add opportunities at a point in the cycle where many hotels with long-term fixed income are fully valued in many markets, yet may face rising interest rates and resulting potential value impact over the coming years,' commented Jochen Schaefer-Suren, a partner managing Internos’ Hotel and Leisure division.
Hotel Fund II focuses on 3-4* city centre business hotels across Europe that offer value add opportunities. With a targeted LTV of 50%, according to Internos, the initial equity permits the acquisition of hotels worth over €260 mln. The company said it was in advanced talks on a number of deals and would most likepy deploy the initial capital over the next 12-18 months.
Internos now manages 14 hotels in its hotel real estate fund I, which has paid out over 8% cash dividends every year since 2012 and achieved an IRR of 14% by 2016, as well as four hotels representing €150 mln of AUM in its separate account hotel value-add mandate.
