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TPG buys Europe’s largest budget hotel platform

The San Francisco-based private equity firm has acquired a 20,000-bed hostel and hotel platform which has 31 assets in 19 major cities across Europe. 

TPG Real Estate, the real estate arm of San Francisco-based private equity firm TPG has purchased German property platform A&O Hotels & Hostels, the largest privately-owned budget hotel chain in Europe for an undisclosed fee.

The deal sees TPG Real Estate acquire 31 leased and owned assets with more than 20,000 beds, with the majority located in Germany and the remainder in Venice, Vienna, Prague, Leipzig and Copenhagen.

It is understood that key members of A&O’s management team, including chief executive officer (CEO) Oliver Winter, will continue to lead the company after the transaction.

According to the A&O website, the 31 assets combine a two-star hotel with the option of a modern hostel under the same roof.

A spokesman for Berlin-based A&O said the transaction would help the firm expand its operations, strengthening its position as one of Europe’s leading budget hotel investment, development, and management groups.

“We founded A&O almost twenty years ago in Berlin, and it has grown into one of the leading German budget hotel operators,” said A&O CEO Winter. “With TPG’s global presence and expertise in buying and building platforms, I believe it is the ideal partner to strengthen and expand our business across Europe.”

“A&O is a strong operator that is well positioned to capitalize on favorable global and European travel trends. Over the last number of years the sector has experienced rapid growth, particularly due to an increase in travelers in search of affordable, reliable, lodging options,” Anand Tejani, partner at TPG Real Estate, said.

In one of TPG’s most recent deals, the firm sold Point Park Properties (P3), the logistics platform it co-owned with Ivanhoe Cambridge, to Government Investment Corporation (GIC), the Singaporean sovereign wealth fund, for €2.4 billion. The deal for P3, which was formally agreed in November, was completed today,