London-based firm Patron Capital and its co-investment partner Invesco Real Estate have agreed to sell Generator Hostels to Queensgate Investments for €450 million.
Generator Hostels owns 14 predominantly freehold assets (12 operational and two under development), totaling 8,639 beds, located in London, Paris, Copenhagen, Amsterdam, Miami, Dublin, Hamburg, Barcelona, Berlin Mitte, Stockholm, Madrid, Venice, Berlin Prenzlauer Berg and Rome.
“Generator has performed strongly under Patron’s ownership, during which time we have expanded the business significantly from just two hostels to 14, and have redefined the hostel concept into the design-led hospitality experience that today’s guests want,” commented Keith Breslauer, managing director of Patron.
The firm initially acquired the sites and management of the family-owned budget youth hostel accommodation business using capital from Patron Capital’s Fund III, a €867 million 2007-vintage vehicle, back in 2007.
Queensgate Investments, the London-based private equity real estate firm, funded its acquisition with capital from Queensgate Investments Fund II, a £500 million vehicle raised from Hong Kong’s Peterson Group back in 2014.
“Generator Hostels represents high-quality freehold assets, robust revenues, an attractive lifestyle brand, and material scalability opportunities,” Jason Kow, chief executive of Queensgate Investments, said.
“Generator Hostels plays to Queensgate’s strengths of working with incumbent management to improve the customer experience, to streamline operations and to bolt on additional assets to this impressive platform.”
Patron was advised by Lazard and CMS; Queensgate was advised by Brown Rudnick. Invesco Real Estate was represented by Freshfields.