Global investment group Eurazeo announces €300m European hotel strategy

Global investment group Eurazeo has announced the establishment of a strategic partnership with the Public Sector Pension Investment Board (PSP Investments), one of Canada’s largest pension investment managers.

The partnership will initially focus on investing in hotels across Europe, targeting large assets or portfolios well-positioned to benefit from the sector’s post-pandemic recovery.

Eurazeo and PSP Investments will invest equal amounts in the joint venture, planning to invest up to €300 million of equity in hotel assets or portfolios across Europe, which offer significant potential to unlock value through upgrades and targeted asset management initiatives.

The partnership has already agreed on the acquisition of the venture’s first investment, FST Hotels: a Spanish hotel group that owns and operates an 800-room portfolio across five hotels, primarily located in Madrid and Barcelona.

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The hotel group, operating under the Ayre brand, will be acquired from Grupo Empresas Matutes and El Corte Inglés.

The transaction is expected to be completed by the end of March and the hotels will undergo refurbishment, repositioning and rebranding.

In line with all future investments of the partnership, the refurbishment program will be carried out with a strong sustainability component, focused on monitoring and reducing water consumption, energy usage, and carbon emissions.

Renaud Haberkorn, Managing Partner of Real Assets at Eurazeo, commented: “Since establishing our real estate division in 2015, Eurazeo has invested almost €900 million of equity from its balance sheet in real estate opportunities targeting properties and companies with underlying real estate assets across Europe.

“Exits to date have delivered strong performance and, with our proven track record, we are now looking to invite like-minded third-party partners to invest alongside us in a pan-European opportunistic real estate investment program. We are thrilled to welcome PSP Investments as our first partner in a dedicated hospitality partnership, as part of this program.”

Stéphane Jalbert, Managing Director, Head of Asia-Pacific and Europe, Real Estate Investments, PSP Investments, added: “We anticipate the hospitality sector in Europe will present an attractive recovery play as travel resumes and, together with Eurazeo, are working to capitalize on this opportunity.

“We are excited to have established this new partnership with Eurazeo – with their proven expertise in the hospitality sector – and look forward to exploring further investment opportunities together.”

Source: Botique Hotelier

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