Real estate

European Hotel Strategy

Hotel real estate is an established sector providing long term indexed income potential from high quality assets in central locations. The hotel sector across Europe has shown above inflation growth over the last 20 years; we believe this is set to continue in the prime markets across Europe, underpinned by long-term fundamental travel demand drivers. A hotel strategy provides diversification from other real estate sectors, and the longer dated income offers the potential for stable investment performance.

At a glance

With its strong income component, our European hotels strategy offers an investment opportunity into the region’s hotel sector where supply/demand fundamentals remain supportive of above-inflation ‘Revenue Per Available Room’ (RevPAR) growth in key cities across the continent.

Growing sector

Driven by increasing tourism and business travel, hotels are a growing sector and can deliver stable yields for 15 years

Track record

Managing hotel strategies since 2006, Invesco Real Estate was one of the first to develop a dedicated European hotel strategy

Diversification benefits

Comprising high-quality hotels of international brands across Europe, the strategy can help diversify mixed asset client portfolios

Goals

The strategy provides access to opportunities that aim to enable stable long-term returns with the potential for value growth through investments in leased hotel properties. The strategy aims for a total return of 7% to 8% over a rolling five-year period with an income return of 5.5%.

(Target returns are gross of fees and are not guaranteed.)

Investment process

Our goal is to select investments that provide the optimal combination of market, micro location, brand and operator to drive above market revenue growth and create long-term and sustainable value.

We invest in high quality assets in key gateway cities in Europe, focusing on high barrier markets with long-term growth potential. Relative attractiveness is based on fundamental analysis, supported by detailed micro location assessment.

Our approach identifies hotel brands that target a clear consumer need, offer the prospect of RevPAR premium / rent guarantees vs competitor hotels and can add long-term value.

We target single asset deals of €50-100m and portfolios of up to €500m for core/core-plus investment mandates, as well as platform and early-stage deals for opportunistic capital. Deals are typically structured as hybrid leases with fixed and variable components that provide both downside protection and upside potential.

Each mandate is based on defined investment objectives. Following acquisition, we add value throughout the investment lifecycle with a proactive and hands-on asset management approach, which focuses on ESG.

Why Invesco

With 592 staff located in 21 offices globally across 16 countries, Invesco Real Estate is responsible for assets of around 82.7 bn EUR[1] and has the global strength of a large organisation complemented by the expertise of on-the-ground specialists in the world’s main real estate markets.

Proven hotel expertise

We are pioneers of investing institutional equity into the hotel sector and one of the first investment managers to devise a dedicated hotel strategy for the European real estate industry. We have a 15-year track record managing sector-specific and mixed-class vehicles as well as separate accounts.

Focused on institutional needs

Our focus is on clients‘ objectives, risk appetite and available capital to determine the most appropriate method for investment. We offer a wide range of solutions for different types of risk appetites and strategies. As a sustainable investment manager, we have a global sustainability policy and share best practice across our global business.

Investment team

Supported by Invesco Real Estate’s extensive global resources, our dedicated, multi-disciplinary hotel transaction and asset management team can demonstrate a long-standing track record in the hotel and real estate industry.

Our specialist hotel team combines expertise ranging from fund management, investment and debt structuring transactions, to client servicing, asset management and research. The team is experienced in cross-border investments, leveraging Invesco Real Estate’s global platform and on-the-ground experts with local knowledge.

Highlighted strategies

Related insights

success failure

How can we help?

Let us know using this form and one of our specialist team will quickly get back to you.

How can we help?

Your contact information.

When you interact with us, we may collect information about you which constitutes personal data under applicable laws and regulations. Our privacy notice explains how we use and protect your personal data.

How can we help?

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Footnotes

  • Past performance is not a guide to future performance

    Source: Invesco Real Estate as of 30 June 2022. 

Investment risks

  • The value of investments and any income will fluctuate (this may partly be the result of exchange-rate fluctuations) and investors may not get back the full amount invested.

    Invesco Real Estate – European Hotel Strategy: Property and land can be difficult to sell, so investors may not be able to sell such investments when they want to.

    The value of property is generally a matter of an independent valuer‘s opinion. As this is a theme-based strategy, investors should be prepared to accept a higher degree of risk than for a strategy with a broader investment mandate

Important Information

  • This Marketing Communication is for Professional Investors only. Data as at 30 June 2022, unless otherwise stated. By accepting this document, you consent to communicate with us in English, unless you inform us otherwise.

    This is marketing material and not intended as a recommendation to buy or sell any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication.

    Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice. This document does not form part of any prospectus.  It contains general information only and does not take into account individual objectives, taxation position or individual financial needs.  It does not constitute a recommendation of the suitability of any investment strategy for a particular investor.  Nor does it constitute an offer or solicitation by anyone in any jurisdiction in which such an offer is not authorised or to any person to whom it is unlawful to make such an offer or solicitation.

     

    EMEA 2447501/2022