Blueprint: Tristan’s budget hospitality splash, Actis’s $700m Asia close, Hodes Weill’s next step in Europe

Tristan Capital's big bet on hospitality, Actis strengthens in Asia with fund close, Hodes Weill European expansion, and more in today's briefing, exclusively for our valued subscribers.

They said it

“When you have too much debt and the market turns, you have to sell some of your good assets.”

Rob Virdee, senior analyst at advisers Green Street, on Unibail-Rodamco-Westfield exiting the US market, as reported in the Wall Street Journal

What’s new?

Arriving at Point A
It is check-in time for Tristan Capital Partners. In partnership with hotel company Queensway, the London-based manager has acquired a majority stake in Point A Hotels, a budget hospitality chain with 1,520 rooms across 10 hotels in the UK and Ireland. The deal, valued at £420 million ($546 million; €503 million), represented a full exit for UK charitable foundation Wellcome Trust. It marks the latest milestone in Tristan’s hotel investment strategy, which the firm launched in January 2021 and followed up with the acquisition of a Manchester hotel in October 2021. Although the hotel strategy was originally expected to have a distressed focus, Point A is considered more of a growth opportunity than a distressed one, according to a source familiar with the deal. Indeed, Tristan and Queensway have committed significant additional equity to fuel Point A’s next phase of growth, with the goal of doubling the size of its portfolio over the medium term. Tristan will look at further expansion in the hotel sector on multiple fronts, including M&A.

Actis’s Asian sequel 
Actis is continuing to expand its real estate presence in Asia as the firm closed its latest regional flagship opportunistic fund. Since it was launched in 2019, Actis Asia Real Estate II has attracted $700 million from investors and is expected to contain up to $1 billion of investable capital over the life of the fund, per a release. The fund is already 50 percent committed to so-called ‘new economy’ assets, such as logistics and industrial properties, specialized offices and data centers. The closing comes on the heels of an expansion by the firm in Japan. Actis opened a Tokyo office, hiring Jun Ohashi and Tareq Sirhan from Macquarie Capital in March as head of Actis Japan and head of energy of North Asia, respectively.

CBRE IM and NN go Dutch
CBRE Investment Management continues to deepen its impact in the Netherlands. The Los Angeles-headquartered manager has partnered with The Hague, Netherlands-headquartered financial services firm NN Group to launch a joint venture focused on Dutch sustainable and affordable residential assets. The venture, Positive Impact Programmatic Venture, has an initial equity commitment of €500 million for both acquisitions and development of assets. The vehicle already has one asset in Eindhoven. Both firms have specific climate guidelines for the properties they are targeting, including net-zero operational emissions by 2035. The emissions goals follow in the footsteps set by European peers NREP and Octopus Real Estate. The Nordics specialist manager has a firm-wide goal of net-zero by 2040, while UK-based Octopus has set two net-zero goals: 2040 for its existing properties and 2030 for any new development projects.

Trending topics

Warehouses for Ukraine
From time to time, a real estate executive is unable to make a scheduled call with PERE because of unforeseen circumstances. In the case of Roman Skowronski, managing director of Peakside Capital Advisors in Poland, the unforeseen circumstance was a surprise visit by Croatian minister of foreign affairs Gordan Grlić Radman and Croatian ambassador to Poland Tomislav Vidošević, to the City Point Targówek logistics park in Warsaw, part of the portfolio the Frankfurt-based manager purchased with Swiss private markets firm Partners Group in February. The two firms have donated warehouse space to The Polish Red Cross, which is using the property to store, pack and transfer relief supplies for Ukrainian refugees. The organization initially took nearly 26,000 square feet of space and has now more than doubled its square footage at the facility. No end date has been set for the donation period. Other managers that have also provided Polish warehouse space for Ukraine relief efforts include EQT Exeter, which owns multiple assets in the country through its European logistics core-plus and value-add funds.

Core-plus a billion
GI Partners has raised almost $1 billion in less than a year for its first commingled real estate fund. The San Francisco-based firm held a second close of its Real Estate Essential Tech + Science Fund at $1.45 billion in capital commitments after raising an initial $500 million in June 2021. GI Partners exceeded the initial hard-cap set on the vehicle, per a release. The firm didn’t disclose the hard-cap but future commitments would enter a queue at this time, a spokesperson told PERE. The speed and amount of capital proves a continued investor interest in GI Partner’s chosen areas of focus: data centers and life sciences properties. Canadian pensions have shown particular interest in the sector with Oxford PropertiesIvanhoé Cambridge and CPPIB each having entered or expanded in the space in the last year.

The Italian job
Italian real estate just posted its best quarter ever in terms of deal volume. In Q1 2022, €3.4 billion of investments were made in the country, more than double the €1.5 billion average for the last 10 years, according to a report by Milan-based real estate services firm Dils. Notably, over €1.3 billion, or 39 percent, of the investments made in the quarter were in the office sector. Within that, 83 percent of the capital came from overseas. The investment activity was driven by increased leasing in Italy’s two major office markets, Milan and Rome. Milan saw 1.15 million square feet of lettings in the quarter, while the capital saw an additional 587,710 square feet leased. In each market respectively, those take-ups represented increases of 30 percent and 105 percent, respectively, compared with Q1 last year.

Data snapshot

Costly construction
The discrepancy between current final costs on non-residential construction projects and input costs on new deals is increasing, according to a new JLL report. Demand for new projects continues to grow, prompting the advisory firm to adjust its forecasts for 2022. The firm said final costs on projects could increase 8-12 percent by the end of the calendar year.

People move

When in Amsterdam
New York-headquartered Hodes Weill has opened an office in Amsterdam, hiring Barbara Maltha to run it. Maltha comes from CBRE Capital Advisors where she was responsible for capital raising, fund structuring and advisory assignments. Her new role has her serve Europe, Middle East and African clients. She will report to Matt Hershey, partner and global head of distribution, who is moving from the firm’s Denver office. This is the first time the firm has operated its European business outside of the London, citing Brexit and increased market demand as two reasons for the move. Check out our exclusive coverage of the appointment here.

Investor watch

Aussie logistics
Canada’s QuadReal Property Group has ramped up its logistics exposure in Australia. The real estate investment arm of the British Columbia Investment Management Corporation is doubling the capital in its logistics joint venture with Australian real estate investment trust GPT Group. The 50:50 now has A$2 billion ($743 million; €682 million) committed to it after initially launching with a A$1 billion target in February 2021. The venture is being used to acquire and develop a portfolio of Australian prime logistics assets. The partners have invested in seven development projects in its first year. Four of those projects are 75 percent pre-leased. Peter Kim, QuadReal’s managing director for Asia, said in a release that the partnership  has “exceeded our expectation.”

This week’s investor meetings
Tuesday, April 12

Wednesday, April 13

Thursday, April 14

Today’s letter was prepared by Peter Benson, with Jonathan BrasseEvelyn Lee and Christie Ou contributing