Real estate firm buys six Iberian hotels to launch Next Gen brand

by | 28 Oct 2022 | Portfolio

Dutch-headquartered real estate company, Redevco, is to reposition its first six European hotel purchases, with sites in Spain and Portugal.

The firm acquired the sextuplet for more than €80 million to launch its ‘Next Gen Stays’ joint venture (JV) platform.

Post-pandemic resurgence

The investments in Lisbon, Bilbao, Seville, Porto, and Malaga are aimed at capitalising on the post-pandemic resurgence and growth in the youth tourism and experience travel market and aggregate a professionally managed portfolio in a rapidly evolving and fast-expanding sector.

Next Gen Stays fits Redevco’s strategic focus on creating vibrant places in dynamic urban locations, and thereby helping cities to become more liveable and sustainable.

Sustainable redevelopment

The Next Gen Stays investment strategy is targeting a net levered internal rate of return of 15%+ over a five-year period. Redevco is acquiring strategically located under-exploited real estate with local character and redevelopment potential.

The assets are pre-leased to a professional operator at the time of acquisition, and will be redeveloped to create authentic, sustainable, good value accommodation. The intention is to initially build a €250 million portfolio in the Iberian markets with a like-minded JV partner, before expanding into a pan-European hotel vehicle with a target €500 to €700 million investment volume.

Architectural repurposing

The strategy is also targeting the strong sustainability and social returns that can be achieved through repurposing architecturally interesting but outdated buildings and upgrading their environmental footprints. The completed refurbished hotels will be compatible with Redevco’s mission of making its entire real estate portfolio net carbon neutral by 2040.

Israel Casanova, MD for global transaction management at Redevco, said: “By marrying Redevco’s strong retail and urban regeneration real estate investment track record with best-in-class hotel operators, our Next Gen Stays strategy plays to the latest upcoming travel and consumer trends.

“The vast online ‘sharing economy’ market that Airbnb identified and opened-up is now professionalising in a more community-focused way. Our Next Gen Stays hotels form a distinct market sub-segment to target the younger, tech savvy and sustainable travellers that are increasingly seeking out authentic, high quality yet affordable experiences.”

Other transformations

Previous high-profile transformational projects for Redevco include: Mercado San Miguel, the second most-visited tourist destination in Madrid, Spain; One Tower Bridge, an F&B and leisure hotspot in central London, UK; and the redevelopment of a former C&A store in Hamburg, Germany into a retail, hotel, and F&B net zero carbon landmark building.

Elsewhere the real estate firm’s German arm is developing a dual-branded hotel site in Hamburg. Hyatt Centric Monckebergstraße will be a 185-key boutique hotel, and will be combined with the extended stay concept Stay Kooook Monckebergstraße, providing a further 85 rooms. The eight storey building is due to complete in Q1 2025.

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