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 joined INTERNOS (now Principal Real Estate Europe) in 2011 to create and lead our Hotel & Leisure Division (“HLD”) which has grown to a team of 7 hotel real estate experts responsible for hotel transactions, financings, asset management and portfolio management. Today the HLD manages two dedicated hotel real estate funds and a separate mandate with hotel properties worth ca. US$ 750 million and with over US$ 300 million of new capital available to invest in hotel real estate according to different investment strategies, coming to a total of over US$ 1 billion of capital under management for hotel real estate.
Prior to 2011 Jochen held a similar position at Invesco Real Estate where he created and led the hotel real estate fund management team and was also a member of Invesco Real Estate’s Global Executive Committee and Investment Committee. While at Invesco he designed, raised capital for and managed Invesco’s first hotel real estate fund for institutional investors including Generali and Allianz. Accordingly he was responsible for the acquisition, financing and asset management of this hotel fund with a diversified pan European hotel portfolio worth US$ 900 million. From 2006 to 2010 this fund realised excellent results achieving target dividends every year and stable NAV. While at Invesco, Jochen also managed separate sales, financing or investment management mandates including one of €300 million for Generali dedicated to hotel real estate investments.
Previously, from 1995 – 2000, Jochen was at Lazard in charge of M&A in hotels and leisure, where he was involved in transactions 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 Inn hotels in the US and Taj hotels in the USA. At Lazard he also acted as strategic advisor to the Tata group (owner of Taj Hotels) on their hotel expansion in India. In addition, he acted as a strategic advisor to the board of Club Med World on their expansion in urban resorts as well as being a member of the strategy committee of Fonciere des Murs, a French REIT focused on hotel and leisure real estate.
From 1987-1995 Jochen held several senior positions with hotel groups such as: Head of Global Hotel Development for Forte Hotels where he was responsible for the acquisition of Meridien Hotels for £200 million; Vice President Development, Hilton Hotels, responsible for the Americas and Western Europe; and Vice President and Assistant Vice President Development of Meridien Hotels in New York and 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.