(Alliance News) - PPHE Hotel Group Ltd on Tuesday said it is launching a new European Hospitality Real Estate Fund of up to EUR250 million equity.
The Amsterdam, Netherlands-based real estate firm, which operates hotels and resorts, said the fund is intended to enable the company's strategic acquisition of hotels, which will focus on value-add investments across Europe, and will launch with its first asset in Rome.
PPHE said it has agreed with Clal Insurance to participate as a cornerstone investor in the fund, with the firm having committed EUR75 million, with a maximum limit of 49% participation.
PPHE noted that the fund will enable it to accelerate its acquisition strategy of developing attractive hotel assets in multiple European markets.
The company added that the fund would drive growth in its hospitality management platform, as PPHE will be appointed as the hotel management company for every hotel acquired through the fund.
PPHE said that initially participation in the fund will be 49% by Clal and 51% by PPHE, with PPHE contributing the ownership of its Rome asset, worth EUR29.3 million, as consideration for its participation. Clal will subscribe an initial EUR28.1 million in cash.
The company said it has committed to participating up to EUR50 million in the fund, while additional investors will be able to participate for the remaining EUR125 million in the coming year.
The fund is set to have an initial life of seven years.
PPHE shares rose 7.1% to 1,205.00 pence each in London on Tuesday afternoon.
By Harvey Dorset, Alliance News reporter
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