Although cross-border Asian capital flows in recent years have been lower than pre-pandemic volumes, Ed Fitch, head of hospitality UK & Ireland, at Cushman & Wakefield, tracks continued interest from Asian funds.
“We can see a definite trend of Asian capital targeting key European gateways. The headline story of 2024 was bigger US-private equity buying larger UK portfolios and that somewhat eclipsed the resurgence of Asian capital which has been focused on single assets,” he notes.
Yet those single asset deals executed by Asian funds packed a punch, he adds. “These included Singaporean investors CDL and Sun Venture acquiring, respectively, the Hilton Paris Opéra, and the Hyatt Place London, while South Korean investor Sono Hospitality made its European debut with the acquisition of the Dame des Arts hotel in Paris, all of which took place in the first half of 2024.
“This kind of capital is still very much out there for prime assets in key gateways but, on a smaller scale, you can see the reemergence of buyers from Asia in secondary markets, notably CDL Hospitality Trusts buying the Indigo Exeter, or Heeton acquiring an 82-key aparthotel in Edinburgh,” Fitch says.
Key targets
Another deal, this time by Archer Hotel Capital, underlined the ongoing interest of patient or long-term capital in the sector. Archer, a joint venture between Dutch pension fund APG and Singaporean sovereign wealth fund, GIC, was established in December 2018 and today owns 14 high quality hotels in Europe with a gross asset value of circa €2.5 billion. In March of last year, the joint venture acquired the Shelbourne Hotel in Dublin’s city centre from Kennedy Wilson.
Dominic Seyrling, co-CEO of Archer explains: “This acquisition aligns perfectly with our commitment to investing in exceptional assets with enduring value. Archer is dedicated to preserving the Shelbourne Hotel’s legacy while enhancing its offering.”
While Fitch sees Asian investors scouring several gateway markets, evergreen destinations are likely to remain in pole position going forward. “In terms of geographies, London and Paris will remain the core focus followed by the top German cities for the biggest Asian players,” he says. “Beyond that, expect interest from the REITs and wealthy private investors in yield accretive deals in Edinburgh and university towns. Manchester also remains a magnet due to familiarity.”
Further deals are also likely to span the wider category of ‘beds’, he notes. “We also see Asian capital being more active in adjacent sectors such as student accommodation, where Cushman & Wakefield acted on the sale of Benson Yard in Liverpool city centre to CDL Hospitality Trusts in December for its first foray into PBSA.”
Operational appeal
European occupational metrics are also attracting a slate of ambitious owner-operators, including The Ascott Limited, the wholly owned lodging business of Singapore’s CapitaLand. “Ascott has been operating in Europe for over 20 years, giving us a deep understanding of the region’s dynamic market,” says Lee Ngor Houai, Ascott’s chief operating officer, EMEA, South Asia and China. “Europe remains a core market for Ascott, supported by the region’s resilient tourism sector and consistently strong performance, with average daily rates now nearly 30% higher than pre-pandemic levels.”
While parent CapitaLand manages the largest lodging trust in Asia Pacific in the shape of CapitaLand Ascott Trust (CLAS), owner of many European hotels, the Ascott business arm has been increasingly pursuing an asset light strategy to accelerate expansion, adding management agreements while exploring the potential for franchise management.
In 2024, Ascott inked six new signings comprising 1,000 keys, and struck a notable deal with Chelsea Football Club, becoming its official global hotels partner, while rebranding the club’s hotels at Stamford Bridge. This brought Ascott’s total European portfolio to over 7,600 units spanning approximately 60 properties across 27 cities, both operational and in the pipeline.
“Looking ahead, Europe will play a vital role in Ascott’s global strategy, and we aim to make it one of our top three source markets by 2028,” says Lee.
New openings planned
In terms of new openings, “Ascott is set to open six properties spanning close to 1,000 units in Europe this year, two of which are rebranding projects, further expanding our brand presence in the region,” he explains.
This will include expanding Ascott’s The Unlimited Collection, first brought to Europe in 2024 via Edinburgh, with the launch of the newly-rebranded Temple Bar Hotel Dublin. Lee says: “In the second quarter of this year, we look forward to opening our third property under the brand in Leicester, UK. Together, these three properties in Europe offer over 400 units, each providing guests with the cultural charm and local heritage that define The Unlimited Collection.”
He says that an Ascott co-living formula will also get a further roll out this year. “Ascott is also set to expand the lyf brand in Europe with the upcoming opening of four new properties, capitalising on the growing demand for experience-led social living. These include lyf Gambetta Paris, the first lyf property in France, slated to open in the second quarter of 2025, as well as three lyf properties in the UK – one each in London, Glasgow and Manchester – scheduled for the latter half of the year.” By the end of 2025, Ascott expects to have over 1,000 operational units across six lyf properties in Europe.
Part of Ascott’s appeal as a management partner lies in its ability to rapidly convert standing assets to its brands with “minimal disruption, bringing properties to market as quickly as possible”, he notes. “Many of Europe’s heritage buildings, some ideal for adaptive re-use, can also be seamlessly converted and managed under our renowned collection brands.”
Meanwhile, on the franchising front this year, he says that “Ascott will step up efforts in franchise management in Europe, which serves as an efficient pathway to scale our brands in the region while offering owners greater control over their operations”.
This will be backed by in-house expertise, he notes. “With a specialised franchise team supported by a robust framework and operationally ready teams offering deep in-market support, Ascott has effectively seized these opportunities to scale.
“To date, we have launched nearly 1,000 franchise units across key European markets, including Austria, France and the Netherlands, under established brands such as Citadines, lyf, Somerset and The Crest Collection. Looking ahead, we have a strong pipeline of upcoming lyf projects, further expanding our franchise portfolio in the region.”
By Isobel Lee
