Recently formed investment partnership Alchemy Step Hotel Group has acquired a portfolio of eight hotels in Belgium, via the take-over of the FLI Group.
The additions are all branded hotels in key Belgian cities and towns, and include three hotels under Accor’s Mercure flag, two Holiday Inns and two Holiday Inn Express properties. These include the Mercure Antwerp City Centre and City South, Mercure Liege City Centre; Holiday Inn Express hotels in Antwerp City North and Hasselt; Holiday Inns at Ghent Expo and Hasselt; and the Astoria Hotel Antwerp.
An investment partnership
ASHG is a partnership formed by two businesses: Alchemy Step Special Opportunities LLP, and Step Partners GmbH. Set up in 2022, it is targeting the acquisition of two to four star hotels across Europe, with a principal focus on the markets of Germany, Benelux and adjacent countries.
It already owned five hotels, with the new additions taking the portfolio to more than 1,800 rooms. Step Partners will handle the operation of all the properties, under long term management agreements.
The investors plan a number of asset management initiatives to enhance the value of the newly acquired hotels, which are likely to include refurbishment and potential repositioning with new brands. “This acquisition is a significant step forward in our growth strategy, enabling us to expand our footprint and reinforce our leadership in the European hospitality industry,” said ASHG’s Steven Lewerenz.
This deal is just one in a series the investors aim to execute over coming months. They have the financial capability to execute further acquisitions, and will be looking to build a major European portfolio of branded hotels, trading under brands from respected international hotel groups including Marriott International, Accor and IHG Hotels & Resorts.
Looking for more hotels to buy
ASHG’s preference is for hotels with between 90 and 250 rooms, in urban locations that enjoy a stable mix of both leisure and business demand drivers. They will look typically at investments in the range EUR10-50m, with properties that are available freehold or where there are senior secured loans. Hotels are considered suitable if they are being marketed free of operator contracts, or where there is a management agreement with less than two years remaining.
For Alchemy Partners, the foray into European mid market hotels is the latest strategy for a group that has, since founding in 1997, has invested more than GBP5bn in over 200 transactions for those backing its private equity and special opportunities funds. Step Partners has a more direct relationship with the hotel sector, working with institutional equity investors to buy and operate hotels, either singly or in portfolios. Often its work has involved improving and repositioning assets – which will typically see a hotel property rebrand to a new flag, once upgrade works have been completed.
