Hospitality real estate and asset management investor, Pro-invest Group, has set a target of AUD$500 million it wishes to raise from investors to participate in travel recovery through value-add investments in income producing assets.
The company has launched the Pro-invest Asia-Pacific Distressed Hospitality Fund (Fund III), in which is inviting institutional investors, sovereign wealth funds and family offices to invest in luxury, upper-upscale and upscale full-service hotels to prop up the sector and provide operating capital as the sector rebuilds from the COVID-19 pandemic, particularly after international borders reopen.
In addition to Australian assets, Fund III will also investigate opportunities in Singapore, Japan, South Korea and Thailand. Unlike the group’s existing focus on midscale assets, the new fund will look at luxury and higher-end hotel assets which typically experience higher revenue declines during market downturns but conversely, enjoy higher growth rates during market recovery periods.
Pro-invest Group Chairman and Co-CEO, Ronald Barrott, said the strength of the new Distressed Hospitality Fund was the company’s unique structure and investment model.
“Our integrated hospitality platform combines the opportunity for investors to tap into opportunities with our in-house team of experts in refurbishment/development, active asset management and day-to-day hotel operations to drive maximum returns,” Barrott said.
The fund has so far identified opportunities in markets with high entry barriers but strong supply and demand fundamentals. Sustainability initiatives will play a major role in asset selection, in line with the group’s existing commitment to Environmental Social Governance practices. The Fund will also be capable of providing debt to distressed borrowers on top of usual equity investments.
“We are going through a period of significant economic and social disruption, but we remain confident that this is a temporary ‘bump in the road’ for the hospitality sector,” said Pro-invest Managing Partner, Dr Sabine Schaffer.
“In this time of operational difficulty, we see considerable repositioning potential – particularly for distressed assets in the full-service hotels segments – and Pro-invest is well positioned to optimise these opportunities.”