Patron Capital, owner of Generator Hostels, has successfully completed a minority sale of Generator to Invesco Ltd. of up to 23% in exchange for €60m of growth capital. Invesco’s stake in Generator is the inaugural investment by Invesco’s opportunistic strategy, focused on growth businesses, co-managed by Invesco Real Estate, WL Ross & Co, and Invesco Fixed Income. The capital will be used to exponentially increase the number of properties across the globe.
Urban design hostels
This injection of funds by a major global institution confirms Generator as a pioneer in the new breed of accommodation that are urban design hostels and a brand with a bright global future. The chain currently has 5,200 beds in 7 cities across Europe, a number that will near 7,000 by 2015, after three confirmed openings in Paris, Rome and the recently announced Amsterdam.
Accelerating growth plans
Josh Wyatt, Senior Advisor at Patron Capital responsible for the Generator brand, and Chief Strategic Officer at Generator said:
“This transaction, via a global institutional capital partner, is a major proof of concept for hostels as an asset class. Since Patron acquired Generator in 2007, Generator has built a powerful global brand and revolutionised the hostel experience. The €60 million of proceeds cements our valuation premium for Generator and will enable the company to accelerate its growth plans both in Europe and the US, where we believe there is significant potential.”
Carl Michel, Generator’s Executive Chairman, said:
“Generator continues to set the pace for the hostel asset class. This transaction is another in a series of firsts for the hostel industry in that a major, global capital partner has acknowledged the strong growth opportunity for Generator and hostels as a wider institutional asset class. We intend to use this capital to expand our network to the best-in-class cities where our customers and clients expect to see our world class design, superior room product, and stylized social spaces for both locals and global explorers.”
Invesco extending commitment to hospitality industry
Erik Jacobs, Director, Hotel Fund Management Transactions of Invesco Real Estate, commented:
“Through Invesco’s opportunistic strategy we are now extending our commitment to the hospitality industry beyond the traditional lease model. We are excited to be investing in the Generator platform as we see strong fundamentals supporting the hostel segment, and Generator is a market leader in terms of product, design and brand recognition. As an organization, we look forward to assisting Patron with Generator’s ongoing growth by utilizing Invesco’s extensive global network.”
About Generator
Generator (www.generatorhostels.com) offers travellers unique, stylish and design led spaces to enjoy the best social experience of a hostel, in the most central locations and at affordable rates.
All properties include a range of room options from shared to private bedrooms, free Wi-Fi, bar and chill-out areas and localised menus. A memorable city stay is guaranteed thanks to the creative events, Generator’s support of emerging art and local talent and knowledgeable staff that are on hand around the clock.
As Europe’s fastest growing hostel brand, Generator currently has nearly 5,200 beds located across six countries in Dublin, London, Copenhagen, Berlin, Hamburg, Venice and Barcelona. 2015 will expand the capacity to almost 7,000, with openings in Paris (February 2015), Rome (Mid 2015) and Amsterdam (late 2015).
About Patron Capital Partners
Patron represents approximately Euro 2.5 billion of capital across several funds (including its most recent Fund IV) and related co-investments, investing in property, corporate operating entities whose value is primarily supported by property assets and distressed debt and credit related businesses.
Since it was established in 1999, Patron has invested in over 100 transactions across 61 investments involving approximately 40 million square feet (about 3.7 million sq m) in 13 countries, with many of these investments realised.
Investors represent a variety of sovereign wealth funds, prominent universities, major institutions, private foundations, and high net worth individuals located throughout North America, Europe, Asia and the Middle East. The main investment adviser to the Funds is Patron Capital Advisers LLP, which is based in London, and Patron has other offices across Europe including Barcelona, Milan, Luxembourg and Frankfurt (Dreieich); the group is comprised of 70 people, including a 40-person investment team.
Further information about Patron Capital is available at www.patroncapital.com.
About Invesco Real Estate
Invesco Real Estate is a global real estate firm, which has been providing real estate investment and property asset management services since 1983, first in the US and then expanding into Europe and Asia. Globally, Invesco Real Estate has US$61.8bn of assets under management and over 395 staff in 20 offices around the world.