Patron Capital and CoDE Pod Hostels have sold Jacobs Inn, a 412-bed hostel in Dublin, to a fund managed by BlackRock Real Assets.
Last year saw BlackRock acquire a pan-European hostel portfolio as part of a €100m joint venture with Amistat International, with this site set to join the portfolio.
Patron Capital acquired the unbranded hostel located in central Dublin in a joint venture with hostel operator, CoDE, in October 2017. Since then, Patron has repositioned the property, including the introduction of CoDE’s capsule beds, known as Pods, in place of traditional bunk-beds, as well as the restructuring of the ground floor to create a dedicated bar area, a full F&B offering and improved customer experience.
The fund, managed by BlackRock Real Assets, has acquired the property alongside its partner and hostel operator, Amistat Continental. Together, the parties are building a pan-European hostel portfolio, with Jacobs Inn representing the fourth hostel either acquired or under contract since launching the strategy in 2019.
Keith Breslauer, managing director, Patron Capital, said: “When we acquired this asset in late 2017, we did so because we recognised the significant opportunity in the property’s location, the strength of CoDE’s unique capsule bed concept, and the growing appetite from both users and investors for hostel accommodation. Having previously built and sold the Generator brand, the hostel space is one we know well and to have successfully executed our strategy and exited just over two years after acquisition is a strong endorsement of our team’s expertise in creating high-quality hospitality assets.
“Hospitality remains an interesting asset class and we continue to see value and opportunities to invest in hotels and hostels in the UK and Europe.”
Andrew Landsburgh, founder & CEO, CoDE, said: “Having successfully delivered and exited the first pod-style hostel in Dublin, we are now focused on taking this concept to a range of locations in both the Europe and the US, as well as expanding into co-living.”
Last year’s deal between BlackRock and Amistat comprised a seed portfolio of three assets, with an active pipeline of another six.
Thomas Mueller, European head of value-added real estate, BlackRock said: “This transaction presents an opportunity to gain early-mover access into an increasingly institutional but undersupplied asset class. The demand profile for hostels is particularly appealing given the lack of quality, modern stock in the market, which is characterised by fragmented ownership and very low brand penetration.”
The pair said that interest was growing from institutional investors who had invested or expanded in recent years and for whom the acquisition of a portfolio of operational assets should be attractive.
Frank Orenstein, CIO & partner, Amistat added: “We see Amistat as a pioneering lifestyle brand that offers stylishly-designed, safe and tech-infused social hubs aimed at experience-hungry youth travellers of the 21st century. In our hostels we are offering shared – and private rooms, both with ensuite bathrooms, bars, dining/cooking areas, work-spaces, chill-out zones, high-tech connectivity and engaging activity programmes. For the young travellers the “living like a local” experience is gaining more and more importance.”