Redevco and Swiss Finance & Property Group AG (SFP Group) have created a joint venture to invest in the hotel sector in the Iberian Peninsula. The goal of this collaboration is to establish a portfolio of assets valued at €300 million, targeting a net leveraged internal rate of return (IRR) of more than 15% over a five-year timeframe.
After completing a first round of financing, the SFP RE Investments SCSp SICAV-RAIF fund has indirectly acquired a majority stake in 'Next Gen Stays', a Redevco platform dedicated to hotel investments, with a particular focus on the growing urban tourism sector. This platform currently includes six properties located in Malaga, Seville, Bilbao, Lisbon and Porto, acquired in October 2022 for €80 million.
Hannah Evans, investment director at Redevco, said: "By acquiring and refurbishing strategically located properties that are currently under-exploited but retain their local character, we create an attractive investment product and make cities more sustainable".
These properties will be leased to hotel operators who specialise in integrating technology solutions, with the aim of transforming them into sustainable and affordable accommodation focused on the young population. This initiative aims to address the needs of millennial and Generation Z travellers, who are currently not fully satisfied by the hotel industry. The strategy seeks to provide more flexible, eco-friendly and community-based stay options. The establishments, once renovated, will be in line with Redevco's goal of achieving a carbon neutral real estate portfolio by 2040.
Patrick Brenninkmeijer, Redevco's director of business development, said, "Redevco and SFP will collaborate to capitalise on the resurgence and growth of the youth and experiential tourism market. We look forward to building together a portfolio of professionally managed hotels in key cities across Iberian".
The partnership between the two entities seeks to maximise investment through a dynamic and research-based approach, ensuring efficient and advanced management by modern hotel operators. Redevco's strategy to uncover value opportunities in prime urban locations will be key to attracting hotel operators focused on optimising profitability per room and maintaining competitive costs and rates.
SFP Group plans to increase its investment in this platform through future capital increases to acquire additional properties.
Philipp Braunwalder, CEO of Swiss Finance & Property UK, commented: "Working together with Redevco on a project dedicated to a young segment of the population is both rewarding and inspiring. We are very pleased to be making our debut in the hotel sector with a trusted partner by our side. At SFP, we are committed to providing innovative real estate solutions for the younger generation, while keeping the focus on community advancement and sustainable development".
