Principal Hotel & Leisure DivisionIntroduction and Strategic Offering
The Hotel Funds I and II are not open for new investors, the interests therein are not available for acquisition and such interests are not offered or marketed for acquisition pursuant to this website.
Principal Hotel Real Estate Fund
In 2012 Principal achieved first closing of its first Hotel Real Estate Fund with a core/core plus investment strategy and €75 million equity, which thereafter more than tripled to €245 million of equity from seven German institutions. This fund – a German Spezialfond managed by Principal’s German KVG – focuses on a strategy of acquiring existing, leased 3-4* hotels in major cities in the core Eurozone countries and is financed with a maximum 40% LTV. To date the fund has acquired 16 hotels and already sold 2 hotels successfully in 2016, so that the fund now holds 14 hotels. Since 2012, the fund has generated dividends of over 8% p.a. and total returns of 13% p.a. up to 2017. The fund is now fully invested and recently reached AUM of €500 million.
Principal Hotel Value Add Separate Account Mandate
In 2013 PHL won a separate account “Value Add” Mandate to invest €100m equity into hotel real estate offering value add opportunities across Europe for a German Pension fund. The mandate’s investment strategy calls for 50% LTV financing implying €200m of total hotel investment for this mandate. The agreed strategy is to focus on the European Union (mainly Eurozone) and to target 3-5* hotels in city centre locations offering various value-add opportunities such as renovation, lease renegotiations/ extensions, tenant changes/ repositionings, capital restructuring or opportunities at market level such as counter cyclical investments.
For this separate account we acquired or asset managed since 2013 five hotels in Germany, Italy, Spain and Hungary for a total investment of €180m.
Today, we are pursuing new hotel investment opportunities for this mandate while already considering the sale of select assets in this portfolio to crystallise value where we implemented key elements of our value add strategy.
Jochen Schaefer-Suren - Chief Executive Officer of Hotel & Leisure Division - Biography and contact details
Chief Executive Officer of Hotel & Leisure Division
Jochen Schaefer-Suren joined Principal Real Estate Europe to set up and lead its Hotel & Leisure Division in January 2011. Previously he held a similar position at Invesco Real Estate and was also a member of Invesco Real Estate’s Global Executive Committee and Investment Committee. Whilst at Invesco he designed, raised capital for and managed Invesco’s first hotel real estate fund for institutional investors, like Generali and Allianz. For this fund he was responsible for the acquisition, financing and asset management of a diversified pan European hotel portfolio worth about €700 million. From 2006 this fund achieved excellent results achieving target dividends every year and stable NAV in 2010. Whilst at Invesco, he also managed separate sales, financing or investment management mandates including one of €300 million for Generali for hotel investments.
Previously Jochen advised Club Med on their strategy and acquisitions outside their core resort business. From 1995 to June 2000, he was at Lazard in charge of M&A in hotels and leisure. During this period he was involved in sales and acquisitions totalling over £1 billion including 8 hotels of Trusthouse Forte’s Exclusive Hotel collection (such as George V Paris, Hyde Park London and Plaza Athenee hotels in Paris and New York), 61 Holiday Inns in the US and Taj hotels in the USA as well as acting as strategic advisor to the Tata group India, owner of Taj Hotels.
In 1994-95, he was in charge of global hotel development for Forte Hotels including the acquisition of Meridien Hotels for £200 million. From 1993 to 1994, Jochen was VP Development, Hilton Hotels, responsible for the Americas and Western Europe. From 1987 to 1993, he first worked as Assistant VP and then VP Development of Meridien Hotels in New York and then Paris.
Jochen holds a Masters in Hotel Business Administration from Cornell University, New York and read Law at the University of Heidelberg, Germany.
Phone: +44 (0)20 7355 8800
|Jochen D. Schaefer-Surén|
Principal Hotel Real Estate Fund II
In May 2017, building on the success of the first Hotel fund, Principal achieved the first closing of its second Hotel Real Estate Fund with equity of €133 million from seven German institutional investors. All but one of the seven investors had already invested in Hotel Fund I. With a target LTV of 50%, the initial equity allows this second hotel fund to acquire over €260 million of hotels. Hotel Fund II provides investors with access to value-add opportunities at a point in the cycle where many hotels with long-term fixed income are fully valued in many markets, yet may face rising interest rates and resulting potential value impact over the coming years. The new strategy focuses on creating value at the asset and market level, which can be achieved in any general market context. This highlights the need for a very experienced specialist hotel real estate fund management team to design and implement the value-add strategy at the asset level.