March 25, 2024
Redevco and Swiss Finance & Property Group (SFP Group) have formed an Iberian hotel Joint Venture. Following a first close, a fund managed by SFP has indirectly taken a majority stake in ‘Next Gen Stays,’ currently comprising a seed portfolio of six assets in Portugal and Spain in the Lisbon, Porto, Bilbao, Malaga and Seville. The strategy is targeting a net levered IRR of 15%+ over a five-year period and aims to build up a portfolio of around €300 million.
Hannah Evans, Investment Director at Redevco, said: “Our value-add Next Gen Stays strategy is an excellent example of Redevco’s focus on repurposing assets to create vibrant places in urban locations. By acquiring and redeveloping strategically located and under-exploited real estate with local character, we create an attractive investment product and make cities more sustainable.”
The assets are leased to professional, tech enabled hotel operators and redeveloped to create authentic, sustainable, good value accommodation targeting younger travellers. The target consumer base of millennials and Gen Z travellers are currently under-served by the hospitality sector, and this strategy is designed to cater for their demand of more flexible, sustainable and community driven stays. The refurbished hotels will be compatible with Redevco’s mission of making its entire real estate portfolio net carbon neutral by 2040.
Patrick Brenninkmeijer, Business Development Director at Redevco, said: “Redevco and SFP will now be working to capitalise on the resurgence and growth in the youth tourism and experience travel market and we look forward to creating a professionally managed hospitality portfolio in key cities in the Iberian Peninsula together.”
The partnership’s dynamic and research driven approach combines the specific requirements of a carefully chosen target market with the lean, technology driven hotel offerings that are being provided by a modern breed of hotel operators. Redevco’s ability to identify value in prime city locations is instrumental in attracting operators focused on room-driven revenues, who can benefit from low fixed costs and competitive average day rates.
The SFP fund will look to increase its stake in the joint venture through further capital raises to acquire additional pipeline assets.
Philipp Braunwalder, CEO Swiss Finance & Property UK, said: “Working alongside Redevco on yet another project tailored for the younger demographic has been both fulfilling and inspiring. We are excited to venture into the hospitality sector with a trusted partner by our side. At SFP, our commitment to providing innovative real estate solutions for future generations remains steadfast, while prioritising community enrichment and sustainable development.”
