Freo unveils ambitious plan to invest €400m in Spanish hotels

by | 03 Aug 2021 | News

Daniel Mayans

Real estate specialist Freo Group has launched a platform to invest €400 million in hotels across Spain despite the pandemic, focusing on sites with strong upgrade potential.

A company specialising in high-quality real estate is hoping to embark on an acquisition spree in one of Europe’s biggest travel markets.

Ramping up Freo’s presence in Spain

Freo Group, which has a network of over 100 employees spread across more than a dozen offices around the world, has rolled out a new platform seeking to invest €400 million in Spanish hotels on behalf of institutional capital. The company is already under exclusivity on several transactions and is proposing to undertake a significant programme to reposition these properties.

To deliver on its strategy, the real estate investor, developer and manager is considering a range of opportunities, such as urban hotels in Madrid and Barcelona, as well as leisure hotels in tourism hotspots like the Costa del Sol, the Balearic Islands and the Canary Islands. Targeting well-located hotels with the potential to increase in value through active asset management, Freo is hoping to complete its investment programme within the next three years.

On the back of its expansion in Spain, the group will explore further opportunities to invest in other countries within the European Economic Area, including the UK, Italy and France.

High-profile investments in Madrid and Barcelona

Since first becoming active in the country in 2015, Freo has built up an impressive track record in Spain. Led by Daniel Mayans, Freo Spain has closed transactions worth approximately €750 million in total, both as co-investments and on behalf of institutional investors. Its portfolio boasts developments in Madrid and Barcelona, such as La Sierra and Diagrame, that have been repositioned to achieve LEED Platinum and WiredScore certifications.

Andrew Hunter, managing director and head of hotels for Freo, said: “Covid has provided a significant temporary disruption to hospitality but we are long-term believers in the sector. The current surplus of investment capital and support packages for hotels means that we must do more than ride the cycle and our strategy is very targeted, looking only at quality locations with strong upgrade potential to provide a sound investment basis.

“However, we are also focused on value creation through efficiency and aggregation and will be looking at innovative new products and growth potential, as well as honouring our ESG [environmental, social and governance] ambitions by recycling and improving products, retaining and upskilling staff and creating more efficient assets to reduce environmental impact.”

Spain’s enduring appeal among investors

Mayans, managing director and head of Spain for Freo, has previously worked for GE Capital Real Estate, Metrovacesa and Aguirre Newman.

He said: “Despite the disruption caused by the pandemic over the last year, Spain remains highly attractive to investors as a result of its relative maturity as a market alongside its potential for further growth. The leisure market in Spain is one of the most important in Europe and has a number of excellent operators with inspiring product, but there is space for much more diversity, internationalism and next-generation product.

“Having completed a significant number of transactions and asset management programmes to deliver best-in-class and futureproofed assets, we are excited to continue our expansion and look forward to announcing further acquisitions in the near term.”

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