Invesco Real Estate, the global property investment manager, has held a first close of its second pan-European hotel fund with €85 million ($115 million) of equity from four institutional investors. Further closings are planned over the next 12 months.
Andy Rofe, managing director of Invesco Real Estate, noted that the fund reached a first close quickly after its 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,” he said in a statement.
Invesco’s latest fund follows its first pan-European hotel fund, which closed on €350 million of equity in November 2006 and reached full investment in December 2010. That fund currently comprises a multi-brand portfolio of 17 modern, mid-market hotels across nine countries with a gross asset value of roughly €700 million.
The strategy of Invesco’s second pan-European hotel fund is similar to that of its first. It will invest in mid-market, modern hotels in strategic locations near city centres, airports and convention centres in Europe. It will target properties operated by established national or international hotel operators with recognised brands.
“The sector is one of strategic importance to us as a business and which we believe should be represented in investors’ portfolios,” Rofe said. “We believe that timing is now optimal for hotel investment activity as asset pricing remains low and hotel trading has shown strong signs of improvement across Europe.”