17 July 2017
Berlin
Reporter: Theo Andrew

Invesco announces third European hotel fund


Invesco has launched its third hotel fund with an initial commitment of €179.5 million.

The European Hotel Fund is also seeded with four assets across the Netherlands and Germany, with a value totalling €200 million.

The initial equity commitments come from 10 institutional investors, targeting high-quality hotels in city centres to generate a gross income return of 6 to 7 percent.

According to Invesco, the fund’s launch comes in response to institutional investor appetite to open-ended funds, which often suit hotels due to their longer lease periods.

Invesco plans to grow the fund to €500 million in its first two years.

Marc Socker, managing director of hotel fund management at Invesco, said: “We’re very excited about the launch of the new hotel fund for institutional clients, and continue to see growing interest in this sector, particularly from investors who find the long leases and strong cash flows generated by hotels very attractive.”

He added: “Investors also noticed the way hotels continued to provide a positive total return compared to commercial property during the financial crisis, and this gives them an additional degree of confidence today. The fund will target an income return which provides a premium to the long-run average income return from pan-European commercial real estate.”

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