Investors’ flight to quality

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Investors' flight to quality

[Credit: Towfiqu barbhuiya on Unsplash]

The €200 million loan Beaumier has secured from Cheyne Capital is one of the most significant deals to take place in the second half of this year. It’s a major vote of confidence in the luxury hotel and resort brand, which comprises 12 lifestyle properties across France, Switzerland and Spain. Investment into resorts has been abuzz with activity, and Beaumier has a strong foothold in both mountain and coastal destinations. The seasonality of these locations would effectively allow the planned CapEx programme to roll out without much operational disturbance.

At a time when some lenders are withdrawing from hospitality due to the market’s cyclical nature, it simultaneously presents opportunities for alternative lenders such as Cheyne to establish presence. In addition to funding mixed-use, later living and student accommodation projects in the UK, Cheyne has also lent £108 million to Champneys Health Resorts this year.

In a recent Knight Frank report, Philippa Goldstein, senior analyst, head of hotel research notes “there will be a continued flight to quality and demand for well-invested, renovated hotels in prime locations.” I suspect investment activity in 2023 will be focussed on value-add projects with the “flight to quality” trend extending beyond the hotel sector and influencing the wider operational real estate market.

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