French company Eurazeo is joining forces with Canada's Public Sector Pension Investment Board to strengthen its presence in the European hotel market.
This is the second announcement within a few days that reminds us of the attractiveness of the European hotel market for investors. After London & Regional Hotels and PGGM, it is the French investor's turn to accelerate its presence in the European hotel market by partnering with one of the largest pension investment managers in Canada.
The first round provides €300 million in equity for large assets and well-positioned portfolios to capitalize on the sector's recovery. Each of the partners is equally invested in the scheme. While Eurazeo is no stranger to the European hotel market, Canada's PSP Investments is leveraging the French company's expertise to enter the market. To date, it has a portfolio of retail, industrial and office properties in Western Europe with dozens of assets representing 16.1% of its real estate portfolio.
A first transaction is awaiting clearance by the relevant antitrust authorities by the end of March. The joint venture has acquired 800 rooms from Grupo Empresas Matutes and El Corte Inglés, currently operating under the Ayre brand, in five properties located mainly in Madrid and Barcelona.
The acquired properties will be renovated and repositioned with, according to Eurazeo, "with a strong sustainability component, focused on monitoring and reducing water consumption, energy usage, and carbon emissions to support climate action."
Renaud Haberkorn, Managing Partner of Real Assets at Eurazeo said: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 declares :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.