EU: GIC and existing investor APG will take a “substantial stake” in The Student Hotel to fuel the group’s expansion.
The transaction values The Student Hotel (TSH), including assets already under development, at €2.1 billion. As part of the agreement, founder Charlie MacGregor and APG will increase their current stake in the business.
While GIC joins as a new investor, APG has worked with TSH since 2015. Aermont Capital, which entered into business with MacGregor in 2014, will sell its share.
As part of the agreement, TSH aims to grow its presence from 25 to 50 hotels in key European cities. Currently, 15 are operational and three are opening in Madrid, Barcelona and Toulouse this year.
TSH will also invest in technology to implement a space/time booking platform which will allow guests to book any space in TSH buildings for a defined period of time, including meeting rooms, co-working desks, the gym, pool access and ping pong tables.
Charlie MacGregor, founder and CEO of TSH, said: “We are very excited to welcome GIC on board, and together with APG, we look forward to bringing The Student Hotel experience to more cities across Europe. We have bold plans and the additional committed capital will allow us to be even more ambitious.
“I’m very grateful for Aermont being alongside us since 2014, for what has been an amazing journey to where we are today. With our hybrid hospitality model, we have become a game-changer for the hospitality industry and have a major growth platform to welcome more guests to our hotels.”
Lee Kok Sun, chief investment officer of real estate at GIC, said: “We are pleased to invest in The Student Hotel as its assets are well-located, enjoy good connectivity to city centres and transportation networks, and are in close proximity to universities and other amenities. We are confident that this investment will generate resilient long-term returns.”
Tracy Stroh, European regional head of real estate at GIC, added: “The Student Hotel’s hybrid hospitality model is unique. Anchored by purpose-built student accommodation that appeals to the student demographic, yet still catering to both business and leisure uses, this flexibility enables TSH to capture opportunities as demand patterns fluctuate throughout the year. We look forward to partnering with TSH and APG to generate more value-add over the long term.”
Robert-Jan Foortse, head of European property investments at APG, said: “We are excited about the opportunity to increase our exposure to TSH, and to support the further growth of the platform. We want to thank Aermont for all of its efforts over the past years, and for being a great partner.
“Together with GIC, Charlie McGregor and the rest of the TSH team we are looking forward to further expand TSH’s unique hybrid and exciting concept across Europe. We are convinced that TSH will provide an attractive long term, stable investment return for our pension fund client ABP, and its participants.”
Vincent Rouget, partner at Aermont Capital, said: “Since 2014, we have been the proud partners of Charlie MacGregor, The Student Hotel and its management team, and APG. This great journey which started with one promising project in Amsterdam turned into an unrivalled portfolio of 25 prime assets and projects across eight countries in Europe.
“The Student Hotel investment underscores well Aermont Capital’s expertise and experience at supporting operational real estate platforms to fulfil their potential through real estate led strategies. Charlie’s vision of building a truly hybrid hospitality operating model has positioned The Student Hotel at the forefront of both hospitality and real estate trends, and TSH’s future is bright under its new shareholders’ stewardship.”
Morgan Stanley acted as financial advisor to TSH, Aermont Capital and APG. Allen & Overy acted as legal advisor to Aermont. Loyens & Loeff acted as legal advisor to TSH.