Invesco RE seals first deal for new hotel fund

Global real estate investment manager Invesco Real Estate (IRE) has concluded the first acquisition for its second pan-European hotel fund with the sale and leaseback of a portfolio of five hotels in Munich, Hamburg, Frankfurt, Vienna and Salzburg. The total acquisition price amounts to EUR 170 mln. The portfolio is long-let on 25-year leases to international hotel operator NH Hotels.

'We are delighted to have secured this diversified portfolio of well-located hotels as the initial investment for our second hotel fund. This is in part due to our good, direct relationship with NH Hotels,' said Marc Socker, director of Hotel Fund Management at IRE. 'The locations of the portfolio represent some of Europe's best performing hotel markets, which are expected to benefit from strong growth, in our view.'

The seed portfolio consists of five modern, and recently refurbished, mid-market hotels in strategic city centre and airport locations. The Salzburg and Hamburg city centre hotels benefit from being in highly visible and accessible central locations, well connected to the historic city centre and CBD, respectively, and local trade fairs. The Vienna, Frankfurt and Munich airport hotels benefit from recent significant growth in international and domestic passenger volumes, while NH Vienna Airport is the only hotel located on Vienna's airport grounds.

IRE will hold further closings for its second pan-European hotel fund over the next 12 months and is currently analysing potential future investments in Paris, Lyon, Barcelona, Berlin and Glasgow.

The investment manager said earlier in March that it had raised EUR 85 mln of equity from four institutional investors in the first close of its second pan-European hotel fund. The fund is designed to build on IRE's first pan-European hotel fund, which is now fully invested following the purchase of the 17th hotel, the Novotel Hanover in Hanover, Germany earlier this year. This brings the first fund's total investments to about EUR 700 mln across nine European countries.