Principal AXA € 545 Mio Hotel portfolio sale –
Since 2010/11 I have worked on designing the investment strategy, raising capital and then investing the capital into a total of 16 hotels for the Principal Hotel Real Estate Fund I. This was originally called the Internos Hotel Real Estate Fund I prior to Internos Global Investors sale to the Principal Group in 2017. We have now been able to conclude with the sale of the remaining hotels in the fund to the Axa to exit the investment and winding up the fund in early 2020. This has been a great success due to a good selection of hotels and markets as well as value add intiatives like renovations and lease extensions as well as attractive financing. However it is clear that a significant part of the success of this hotel fund I designed is due to the fact that hotels as income generating assets in a world of ever lower interest rates are of great interest to investors both institutional or retail. This is across real estate asset class but particularly for hotels which before were considered specialist assets and too risky trading assets but today are valued as they are so long term income generators. As a result a lot of new supply of hotels is also coming into the markets but one has to be careful about how to invest in hotels today. We have a new hotel fund II focused on value add assets where we look for turn around situations or special circumstances where we can add value at the asset level such as rebrandings or renovations or various other asset management initiatives. Stay tuned for more news from the hotel world real estate assets in general and the investment markets as a whole. 2020 and beyond promise to be interesting ! Happy new year.