Redevco, a real estate management company, has entered the European hotel sector by purchasing six properties in Spain and Portugal for more than €80 million. The investments in Lisbon, Bilbao, Seville, Porto, and Malaga will help Redevco’s Next Gen Stays joint venture platform get off to a good start.
Over five years, the Next Gen Stays investment strategy seeks a net leveraged IRR of 15% or higher. Redevco is acquiring underutilized real estate in crucial locations with local flavor and redevelopment possibilities. At the time of acquisition, the assets were pre-leased to an operator and will be refurbished to produce genuine, sustainable, and good-value accommodations.
The plan is to initially establish a €250 million portfolio in Iberian marketplaces with a JV partner before growing into a pan-European hotel entity with a target investment volume of €500 to €700 million.
The plan also aims to create substantial ecological and social benefits by reusing aesthetically appealing but old buildings and improving their environmental footprints. The finished hotels will be in line with Redevco’s goal of turning its whole real estate portfolio net carbon neutral by 2040.
Israel Casanova, managing director of 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 professionalizing 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 travelers that are increasingly seeking out authentic, high quality yet affordable experiences.”