APG, LCP JV looks to launch all-suites brand

APG and London Central Portfolio have acquired the Harrington Hall Hotel in London. Photo credit: Harrington Hall

Netherlands-based APG and London Central Portfolio have formed a joint venture to launch a brand of all-suites lifestyle hotels. The JV is the latest investment by pension delivery organization APG in the hotel sector, which it expects to grow in the coming years.

The pair acquired the Harrington Hall Hotel in London, which they said would be “the first in a program of acquisitions to provide an all-suite[s], lifestyle hotel brand in the very center of London catering [to] the budget-conscious business and leisure traveler.” The hotel is due to open in spring 2022.

Robert-Jan Foortse, head of European property investments at APG, said, “This acquisition represents an attractive opportunity to gain access to a high-quality property and add value through refurbishment, innovation and repositioning to meet the needs and aspirations of today’s travelers.

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“With our partner, LCP, we intend to create a new type of accommodation for the prime central London market which is cutting edge in terms of place-making, whilst also promoting the highest standards in environmental and social responsibility," he said.

The group told our IHIF newsletter it has yet to reveal the name of the brand but was “currently considering a number of potential further acquisitions in the key micro-markets of prime central London.”

APG is the largest pension delivery organization in the Netherlands; managing approximately €529 billion in pension assets as of August.

Last year, the company built its interest in the hotel sector with a number of deals, beginning with committing additional equity to CitizenM as part of the transaction that saw Singapore’s sovereign wealth fund GIC acquire a 25 percent stake in the company.

The agreement gave CitizenM €750 million to invest in expansion, with Foortse drawing attention to the growing importance of experiential travel. He said, “Modern travelers are looking for experiences and tend to put less value on material things.  Travel is an important experience in their lives. Nowadays, modern travelers, including millennials, have different expectations when they are looking for accommodation[s]."”

Earlier this year, APG and GIC Real Estate worked together again, launching a jointly owned European hotel investment vehicle, Archer Hotel Capital, following last year’s purchase of a stake in AccorInvest by GIC, as the sovereign wealth fund looked to strengthen its long-term position in Europe.

The Archer Hotel Capital portfolio comprised 11 hotels located in major cities across Western Europe with a gross asset value of around €2.1 billion. All the hotels were formerly part of the Host Hotels & Resorts European joint venture, with APG and GIC Real Estate having bought out Host’s 33 percent stake last year for around €700 million.

APG also has an investment of €100 million in The Student Hotel, dating from 2015.

Foortse anticipated the sector would receive a further boost in the coming years due to the expected growth in tourism and business travel.

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