Investor King Street Capital Management has made a EUR400 million investment in one of the key players in Europe’s burgeoning hybrid accommodation marketplace.
The strategic equity investment will enable Spanish-based Room00 Group to substantially expand its hostel and hotel business across Europe, building out an urban lifestyle hospitality platform. Key markets for growth will be Italy, Portugal and the home market of Spain.
A Spanish success story
Room00 was founded in 2012, and already has around 30 properties operating across Europe, under four brands. And it has a secured pipeline of 20 more sites in development. Many of these are signed under leases or management agreements, and it is envisaged that the new funding will enable the business to also directly acquire properties, in future. Sites in markets including Madrid, Barcelona, Lisbon, Porto, Milan, Rome and Florence will be on the group’s shopping list.
The company is also seeking strategic partners. In Italy, it will work with Kryalos SGR to build a property investment vehicle that will support future growth. The fund manager is an active player across the Italian property market.
The business currently trades under four brands: Room00 Hostels, Toc Hostels, room Select Hotels and LETOH LETOH. Room00 has three hostels in Madrid, plus Lisbon, Seville and Valencia. Room Select Hotels are open in Bilbao, Lisbon, Madrid, Porto, Rome and Seville.
The TOC brand was acquired in September 2024, when Room00 paid around EUR20 million for the business. It came with operating hostels in Barcelona, Granada, Madrid, Malaga, Seville and Valencia.
LETOH LETOH is a lifestyle hotel brand that currently has operating sites in Bilbao, Madrid, San Sebastian and Seville. Future openings are promised in Lisbon, Malaga and Porto.
Paul Brennan, partner and co-head of real estate at King Street commented: “We view Room00 as one of the strongest, most innovative and scalable platforms in the European hospitality landscape. Its fully integrated operating model and strategic focus on prime city centre locations position it as a valuable partner for our real estate growth strategy in Europe.”
Investment to back substantial growth plans
King Street is no stranger to the European accommodation space. In recent years it has partnered in the development of the Palmares resort in Portugal, and in developing the luxury W branded hotel in Rome, Italy.
Ignacio Requena, founder and CEO of Room00, said the new investment will allow the business to expand as a vertically integrated operating and investment platform. His aim is to grow the Room00 business to 200 sites, with 15,000 rooms across mainland Europe over the next four years. The UK will not be left out, with an expectation that the business will acquire its first asset in London by the end of 2025, and build to 1,000 rooms in the UK capital within the four year timeframe.
