Invesco Real Estate (IRE), the global property investment manager, is pleased to announce that it has achieved a first close of its second pan-European hotel fund (Close-ended fund, not available to the public) with 85 million (US $115 million) of equity from four institutional investors. With conservative debt, this provides ca. 170 million of initial capital, with further closings planned over the next 12 months.
The fund is expected to build on the successful track record of IRE's first pan-European hotel fund, which closed in November 2006 with 350 million of equity and reached full investment in December 2010 with a pan-European, multi-brand portfolio of 17 modern, mid-market hotels across nine countries with a gross asset value of ca. 700 million.
Andy Rofe, Managing Director of Invesco Real Estate says: "We are delighted to have reached a first close so quickly after the fund's launch late last year. This has, in part, been due to the sector's high income component and the potential to deliver stable attractive long-term returns for institutional investors."
"The sector is one which is of strategic importance to us as a business and which we believe should be represented in investors' portfolios. We believe that timing is now optimal for hotel investment activity as asset pricing remains low whilst hotel trading has shown strong signs of improvement across Europe."
This second pan-European hotel fund's strategy is similar to IRE's first fund. It will invest in mid-market, modern hotels in strategic locations near city centers, airports and convention centers in Europe, focused on long leases and operated by established national or international hotel operators with recognized brands.
Marc Socker, Director of Hotel Fund Management at Invesco Real Estate says: "Hotels are part of a strategic growth sector, providing a stable income product underpinned by strong covenants and rental guarantees. The branded hotel market is a growth sector and such hotels are more fundable, saleable and offer stable high income potential. With low brand penetration in Europe, this provides opportunities for consolidation within the sector."