Avignon Capital, the European property investment and asset management firm has acquired a newly developed serviced hotel apartment, operated under the Staybridge Suites brand for €16.2m.
The newly converted 101 room apart-hotel marks Staybridge Suites’, which forms part of the Intercontinental Hotel Group, first opening in the Netherlands. The 4,766 sqm building is located on Lange Vijverberg, opposite the Houses of Parliament in the historic centre of The Hague’s CBD.
The Hague, which historically has been perceived as a secondary city is now increasingly growing in popularity amongst investors, particularly in the hotel sector, as investors continue to seek out value and strong returns. Hotels in the Hague have witnessed stable trading performance with market-wide REVPAR between €60-65 over the past five years with record growth of 9% in 2017.
Extended stay accommodation combines the benefits of a hotel with the convenience of an apartment, however the Staybridge brand model is more aligned with hotels than apartments due to service offerings such as 24-hour reception, café/restaurant and daily housekeeping.
The Staybridge Suites brand is unique as it ensures every space features a sense of community, comfort and convenience. The brand has doubled in size over the past decade with over 200 serviced apartments located worldwide.
Bianca Tristao, Investment Manager at Avignon Capital said: “This off-market acquisition is attractive to our investors as it provides secure long-term income, with a long unexpired term and annual CPI linked rent reviews.
Staybridge Suites is a well-recognised global brand and there is the opportunity to capture robust growth from hotel demand in The Hague in the long term.
We are seeing investors turning their attention to cities such as The Hague and Rotterdam as Amsterdam continues to experience limited supply and rising prices. The Hague showed the most significant tourism growth of the three largest cities in the Netherlands with 7.7% growth in overnight stays in 2016.
The extended stay sector, seen as a niche alternative within the more established and traditional hotel offering, is attracting attention from investors looking to diversify and achieve attractive risk-adjusted returns, which can be achieved due to the high-profit margin and low operational overhead costs of the sector.
The Netherlands remains a core focus for Avignon Capital with this latest acquisition marking Avignon’s 6th acquisition in the Netherlands”
Haagstate Advocaten and ARC Real Estate Partners acted for Avignon Capital. DLA Piper and PwC acted for the vendor.