Invesco in €170m hotel sale and leaseback

The US firm has made its debut investment for its latest hotel fund, with the acquisition of five properties in Munich, Hamburg, Frankfurt, Vienna and Salzburg from operator, NH Hotels.

Invesco Real Estate, the global property investment firm, has entered into a €170 million purchase and leaseback transaction with hotel operator NH Hotels for its latest hotel fund.

The US-based company has bought a portfolio of five hotels in Munich, Hamburg, Frankfurt, Vienna and Salzburg leased back on 25-year hybrid leases.
Marc Socker, a director who led the maiden deal for the fund, said the locations of the assets in the portfolio represented some of Europe’s best performing hotel markets, which are expected to benefit from strong growth.

The hotels are modern, and recently refurbished, mid-market hotels in city centres and close to airports. In the case of the property in Vienna, the NH Vienna Airport hotel is the only hotel on the airport grounds.

Earlier this month Invesco announced a first close for the fund on €85 million ($115 million). Andy Rofe, managing director of Invesco Real Estate, noted at the time 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.

It will hold further closings over the next 12 months and is looking at investments in Paris, Lyon, Barcelona, Berlin and Glasgow, the company added.