Hybrid apartment provider Zoku International has announced two new sites, two years after opening its one and only site in Amsterdam.
Zoku has revealed new sites in Copenhagen, Denmark, and Vienna, Austria. Both properties will open in 2020, adding more than 290 units to the portfolio. The Copenhagen site, with 160 apartments, came after Zoku won a competition for a site run by the city council. In Vienna, Zoku will be part of the new Prater Glacis project being developed by IG Immobilien.
In February the company was refused permission to develop a site in Manchester, England, despite the support of the planning officers. Council members said the scheme would contribute to loss of buildings that give character to the area.
Earlier this year Zoku appointed Christoph Hager as its new rollout lead for Europe, with growth planned through leases, management agreements and selected joint ventures. Hager joined from Starwood Hotels & Resorts Worldwide, where he was associate director, AME Feasibility. The company now has plans for more than 50 sites over the next decade.
Europe has shown itself to be an incubator for hotel alternatives, with both Safestay and A&O also announcing further expansion.
A&O Hostels bought its first property in Spain to build a 750-bed hostel in Barcelona, with a slated opening in 2021. The Berlin-based budget group, which was acquired by TPG Real Estate last year, purchased the 7,900-square-metre complex in Barcelona’s Hospitalet district and will begin renovation in 2020.
Henri Wilmes, A&O’s chief investment officer, said: “With this third deal in 2018, we have managed to achieve our long-desired entry into the Spanish market—one of Europe’s key markets.”
The company, which currently has 34 buildings across six countries, also is working on expanding into Madrid, Seville, Malaga, Lisbon and Porto.
The news was followed by Safestay noting it had raised GBP11m to fund expansion, shortly after reporting plans for a new site in Vienna.
Larry Lipman, the company’s executive chairman, commented: “We continue to believe that Safestay is a proven and scalable brand. This, together with the current market environment favoring the buyer, means the proposed fundraising is timely and once invested will enable us to leverage the company's existing platform and established brand with a view to building a self-sustaining growth position through significant organic and acquisition opportunities.
“As a management team we are excited by the opportunities in front of us. The proposed new capital reflects our ambition to evolve Safestay into a leading contemporary hostel brand offering guests a safe and stylish experience staying in centrally located buildings at competitive rates per night.”
Some markets remained prohibitive due to their cost. Speaking on a panel discussion after the launch of Christie & Co’s “European Hotel Investment Trends 2018: Connectivity, Hospitality & Opportunity” study, Navneet Bali, chairman, Meininger Hotels, said locations such as London would only be of interest should prices fall—as chairman of the Bank of England Mark Carney has forecast they will, should the UK undergo a hard Brexit.
On the other side of the Atlantic, Bali said one of the issues for alternatives such as hostels was the relative cheapness and availability of land, which meant developers were less likely to take a risk on an untested product when they could as easily erect a hotel.
For those alternatives looking to expand out of Europe, there is much proving yet to be done.
Katherine Doggrell is an editor at Hotel Analyst, the U.K.-based news analysis service for hotel investors