SFP and Redevco launch “Next Gen Stays” partnership in the Iberian Peninsula

21 March 2024

The “Next Gen Stays” partnership aims to establish a strong foothold in the Spanish and Portuguese hotel market by catering directly to an overlooked and underserved consumer base.

• Swiss Finance & Property Group AG (SFP Group), SFP UK Iberian Hotel Operations Ltd (SFP UK Holdco) and Redevco B.V. (Redevco) have completed the first stage of their value-add hospitality strategy with a joint venture and a share deal.
• SFP UK Holdco now holds the majority ownership of a seed portfolio comprising six Spanish and Portuguese assets that will be repurposed and repositioned to create modern and sustainable tourist accommodation. “Next Gen Stays” targets Millennial and Gen Z travellers by offering innovative centrally located, amenity-light hotel experiences.
• SFP Group and SFP UK Holdco recognise Redevco as a trusted local partner, valued for their expertise in sourcing and delivering desirable hotels in a fragmented mid-sector market.
• The venture prioritises improving the sustainability of the assets in its value-add approach.

Despite only an insignificant share of European hotel stock currently meeting the needs of travellers under 40, this demographic is increasingly willing to allocate their disposable income towards travel experiences. As this age group gains in prominence and replaces the baby-boomer generation in the workforce, their significance as a consumer segment continues to grow. The joint venture’s real estate strategy primarily revolves around repurposing underutilised, vacant or suboptimal assets in historical city centres. With a focus on building a diverse portfolio, the venture aims to have a presence across key cities in the Iberian Peninsula, starting with the seed assets in Lisbon, Porto, Bilbao, Malaga and Seville.

The partnership’s dynamic and research driven approach combines the specific requirements of a carefully chosen target market with the lean, technology driven hotel offerings that is being provided by a modern breed of hotel operators. Redevco’s ability to identify value in prime city locations is instrumental in sourcing investment opportunities and attracting operators focused on room driven revenues, who can benefit from low fixed costs and competitive average day rates.

SFP Group has established a Luxembourg-domiciled fund, enabling the investment syndication for the strategy. Moving forward, SFP Group will look to increase their stake in the joint venture through additional capital raises to acquire additional pipeline assets.

Meanwhile, SFP UK Holdco will continue to concentrate on strategic analysis, research, reporting and due diligence activities alongside its strategic partner, Oberland, a London-based hotel investor and developer in which SFP Group is invested. These efforts will be conducted in collaboration with local partner Redevco Iberia S.L., who provides transaction, asset and development management services to the JV.

Partner profile and goals

Redevco has a strong track record of large-scale urban redevelopment projects across Spain, Portugal and Europe. Meanwhile SFP Group, renowned as one of Switzerland’s foremost independent real estate asset managers, is positioned to enhance its international footprint following successful ventures in Denmark and the UK, and its hospitality partnership with Oberland.

Patrick Brenninkmeijer, Business Development Director of Redevco, said: “We are delighted to extend our partnership with SFP and work together to capitalise on the resurgence and growth in the youth tourism and experience travel market and aggregate a professionally managed portfolio in a rapidly evolving and fast-expanding sector. Next Gen Stays fits Redevco’s strategic focus on creating vibrant places in dynamic urban locations, and thereby helping cities to become more liveable and sustainable.”

Dr Sina Shamsoddin, Strategic Business Manager at SFP Group and director of SFP UK, adds: “We at SFP Group are thrilled to further solidify our partnership with Redevco. With both parties bringing complementary skills to the table, our collaboration has created synergies, which pave the way for innovative strategies. The Next Gen Stays strategy aims to contribute meaningfully to society by addressing the needs and preferences of the young generation of travellers. By doing this, we believe we create value for the different stakeholders involved.”

Dedicated to sustainability

SFP Group and Redevco share a common vision to drive greater environmental and social impact, helping transform European cities into more sustainable and liveable places to live, work and play. This joint venture aims to cater to the evolving needs of Millennials and Gen Z by offering sustainable, tailored hotel experiences in well located, amenity-light properties throughout Spain and Portugal. By doing so, the strategy not only boosts local tourism economies and enhances the feel of surrounding neighbourhoods but also contributes to the professionalisation of a fragmented mid-sector hotel market. This forward-thinking investment approach aligns with the values of younger generations, who prioritise sustainable and environmentally conscious choices.

Source: Swiss Finance & Property Corporation