EUROPE – Invesco Real Estate has finished raising capital for its second European hotel fund, having secured €200m from investors looking for stable income returns.
The fund already owned eight hotels in Austria, Germany and the Netherlands, valued at €280m, at the end of February. The new capital, with 50% leverage, will enable Invesco to build up a €400m portfolio.
Marc Socker, senior director of hotel fund management, attributed the successful capital raising to "the recognition from the investor community that [the hotel sector] offers a compelling investment story with long leases and strong, stable income, two features which many investors find attractive in today's environment."
Long-lease property investments have become increasingly attractive to institutional investors and many have looked to the hotel sector where it is possible to secure long leases.
Last month, Union Investment announced that it had acquired a hotel in Barcelona with a 20-year lease for its institutional hotel fund, while AXA Real Estate will include hotels within the strategy of its new UK long-lease fund.
Invesco said it was one of the first investment managers to "devise a dedicated hotel sector investment strategy for the European institutional real estate industry" and owns 25 hotel assets across Europe worth approximately €920m.
Union Investment, which oversees a global hotel portfolio worth €1.7bn, has acquired €400m in hotels over the past three years, of which €150m was in the budget and economy sector.
Internos Global Investors also made two acquisitions last month – two Ibis hotels in Munich and The Hague for €37m – for its institutional hotel fund, which it hopes to eventually increase to €300m in size.