Realia Family Office offers its clients a unique opportunity to enter the UK hotel real estate market, which is currently experiencing a resurgence in the post-pandemic era. Undervalued and outdated hotel complexes are located in prestigious regions of the country with high tourist traffic, including London.
This strategy involves investing in the reconstruction of existing hotels through phased renovation, aiming to increase tourism, star ratings, hotel sizes, room inventory, resulting in enhanced cash flow and property value. Each project will be structured as a separate SPV, allowing ownership of your share and corresponding payouts through Profit Participation Note securities.
We propose investments in our partners’ ongoing projects in the UK to expand your portfolio, generate management-based income during ownership, create a network of hotels nationwide, and eventually exit the portfolio within a five-year horizon through asset sales to institutional investors. The minimum investment amount starts from £500,000.
Both we and our partners are co-investors in these projects, contributing 20% to 30% of the investment. Our partners manage hotel real estate assets worth £250 million in total. Our properties are managed by Hilton, a global hotel chain operator. Annual returns, excluding management fees, amount to 8-9%, with a potential doubling of invested capital over five years, IRR of 20%, and an ROI of 100%, not accounting for asset appreciation over the same period.
Under our partners’ management in the UK, there are 7 hotels, including:
Portfolio #1
- Three countryside hotels (Hilton, Mariott) with significant history and positive post-Covid-19 operational experience.
- Portfolio valuation is around £125 million.
- Equity of £46 million.
- Portfolio IRR of -13%.
- Investment options available:
- Investment in the overall portfolio.
- Investment in individual hotels.
- Combination of both.
Portfolio #2
- Three high-yield assets “Double Tree,” as well as one branded asset, Holiday Inn.
- Portfolio valuation exceeds £68 million.
- Equity of £35 million.
- Investment options available:
- Investment in the overall portfolio.
- Investment in individual hotels.
- Combination of both.
According to Knight Frank, investments in UK hotel real estate grew by £5 billion in 2022. Transaction volume in the UK hotel real estate market exceeded £1.5 billion in the first four months of the year.”