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Schroders raises initial €300 million for debut European hotel fund

Schroder Real Estate’s hotels arm has raised an initial 60% of a €500 million fundraising target for its debut European fund.

According to the manager, Schroder European Operating Hotel Fund I have received €300 million of equity commitments from European institutional investors and family offices, and several more investors in the process of committing to the fund which is expected to reach €800 million of capital (including leverage of 40%) in a few months.

Schroders said the fund will target a portfolio of between 10 to 15 European hotels through the acquisition, selected refurbishment and operational improvement of existing hotels.

Frederic de Brem, head of Schroder Real Estate Hotels, said:” The support we have received from our long-standing institutional investment partners is a strong endorsement of our business and strategy.

“With 60% of the €500 million target fund size already raised, and several more investors in the process, we anticipate closing the Fund in a few months with €800 million of capital (including leverage of 40%) and a strong pipeline including one property already in exclusivity.”

Georg Wunderlin, Global Head of Private Assets, Schroders, said: “At a time when yields are at an all-time low across many property sectors, we believe that this segment of the hotel market has the capacity to generate attractive, risk-adjusted returns for investors looking for alternative, non-mainstream investment opportunities.”

Source: realassets.ipe.com on 21 January 2020 (https://realassets.ipe.com/news/schroders-raises-initial-300m-for-debut-european-hotel-fund/10043329.article)