Schroders Capital is launching a second pan-European hotel co-mingled strategy and an Impact strategy aimed at UK pension funds, the manager said at Mipim.
The UK Impact strategy will specialise in investing in capital-deprived areas of the UK and is being launched with a a UK pension fund cornerstone investor. It is hoped it can eventually grow to around €1 bn of assets.
Robin Hubbard, Schroders’ head of real estate capital formation, said the investing structure would be open-ended and will meet the highest level - Article 9 - of the European Sustainable Finance Disclosure Regulation (SFDR).
‘We will be looking to generate a high social impact while generating an above market return of 7%-8% net over the long-term’, Hubbard told PropertyEU.
The Schroders’ team will use the UK Index of Multiple Deprivation (IMD) to research suitable locations, and will structure regeneration from any appropriate use of buildings and opportunities which would benefit the surrounding area.
The hotel strategy will buy leased hotels, differentiating this product from the operating hotel co-mingled strategy which Schroders launched after it bought specialist value-add hotel asset manager Algonquin in 2018.
The 30-strong Algonquin team has up till now usually directly managed its portfolio. The new strategy will be launched in Q2 and a large European insurance company will be the first investor. This client has committed three hotels valued at over €100 mln as seed assets.
The first hotel strategy raised €525 mln by final close last summer from European insurance companies, primarily from France, the Netherlands and Finland. It bought its first asset, the five-star Grand Hotel Central in Barcelona, last September.
