Acquisitions
Hotel Investment Fund
Realise the Value
Travel and tourism is the world’s largest single market. Growth in Tourism is strong.
We offer all of our stakeholders, investors and owner partners, added value through choosing and operating
the right brands for the right locations and markets.
Long-term leases or well engineered management contracts, a low vacancy risk and good credit ratings of the established hotel operators and/or chains, support our investment objective of generating reliable long-term returns.
In-depth expertise for hotel properties
Hotel real estate requires a high level of specialisation, both on the transaction and contract side. The hotel market is highly complex and dynamic.
We understand the challenges of hotel properties, combining long-term hotel experience with real estate and financial expertise.
Our hotel investment philosophy focuses first and foremost on creating value through improving operational performance, after which we apply our financial engineering skills.
Investment Criteria
We mainly invest in under-performing hotels in strategic locations.
Hotels have to meet tough requirements - before we invest - with regard to property condition and the ability to exit in a reletting scenario.
We conduct a thorough review of hotel operations in addition to analyzing competitiveness and long-term business viability.
This enables us to evaluate and quantify the risks.
How does it work?
Property & Operations
The equity raised is solely used in the property fund (“property”), owned by its shareholders.
All hotel projects are organised in separate SPV’s, the “operations” department of the firm leases these properties from the “Property” department of the group, or third-party lease on a guaranteed rental yield.
“Operations” contract with a brand - for managing, franchising or leasing - assuring a reservation base and services back-up.
“Operations” run a profit centre, funded by the hotels operations free cash-flows, the development management and consulting fees and the key-money from the franchisors.
This covers the various hotel projects’ pre-opening costs and need of working capital. It also covers the cost of the Asset management and operation teams.
“Property” usually exits the SPV investment a couple of years after operational maturity (+/- 5 years), with the worth determined through a multiple of profit, establishing the share value and return to investors.
For managing and enhancing the value of the fund’s assets, “operations” is tributed a % of the profit realized upon exit.
This active ownership business model backed by a superior investment fund, coupled to a crack expert Operations team, complements and strengthens the capabilities of the group.
Having the professional ability to take over the full operation of a third party managed hotel at any time, further reduces operational risk when for instance :
- Lease agreements mature.
- Tenants default.
- Hotels are significantly refurbished and leasing to third parties is not financially attractive.
Having hotel operational capabilities and expertise further allows for better monitoring and adds pressure to a contracted brand’s operational performance.