Hotel and Leisure Division.
|Jochen D. Schaefer-Surén|
Introduction and Strategic Offering
In January 2011 INTERNOS and Jochen Schaefer-Suren entered into an agreement for him to join INTERNOS as the partner responsible for setting up and managing a new specialist Hotel and Leisure division (‘IHL’). Since then INTERNOS has handled over €1 billion of hotel acquisitions, including financing, asset management and disposals for both the INTERNOS Hotel Real Estate fund, a hotel “value add” separate account and various strategic advisory mandates. IHL is a team of hotel specialists capable of managing the full range of investments along the risk spectrum from “core” and “value add” to “opportunistic” in hotel real estate worldwide.
INTERNOS Hotel Real Estate Fund
In 2012 we achieved the first closing of our first INTERNOS Hotel Real Estate Fund with a core strategy with €75m equity, which has thereafter more than tripled to €245m of equity from seven German institutions. This fund – a German Spezial Fonds managed by Internos’ German KAG – focuses on a strategy of acquiring existing, leased 3-4* hotels in major cities in the core Euro-zone countries and is financed with a maximum 40% LTV. To date we have acquired 16 hotels and already sold 2 hotels successfully in 2016 so that the fund now holds 14 hotels. Since 2012, the fund has generated dividends of over 8% p.a. and total returns of 14% p.a. up to 2016. The Fund is now fully invested and recently reached AUM of €500 million.
INTERNOS Hotel Real Estate Fund II
In May 2017, we achieved the first closing of our second INTERNOS Hotel Real Estate Fund with equity of €133 Million from seven German institutional investors. All but one of the seven investors had already invested in Internos’ first hotel real estate fund which has consistently exceeded target returns and recently reached AUM of €500 million.
Hotel Fund II pursues a value add strategy focused on 3-4* city centre business hotels across Europe offering the opportunity to add value at the market- and asset level via renovations, conversions, repositionings or change of tenants amongst others initiatives. Considering the targeted LTV of 50%, the initial equity allows this second hotel fund to acquire hotels for over €260 million.
Hotel Fund II provides investors with access to value-add opportunities at a point in the cycle where many hotels with long-term fixed income are fully valued in many markets, yet may face rising interest rates and resulting potential value impact over the coming years. In such markets, the new strategy focuses on creating value at the individual asset and market level, which can be achieved in any general market context. This highlights the need for a very experienced specialist hotel real estate fund management team to design and implement the value-add strategy at the asset level.