Cogress Pledges £80M for Selina’s Growth in Europe
Main Photo: Selina’s Secret Garden in Lisbon, Portugal
Date: October 2019
Location: Europe – UK & Portugal
Name: Selina
No. of Keys: TBA
Finance: British “alternative finance platform” Cogress has struck a deal to help Selina, the Latin American hotel/hostel hybrid, grow in Europe. Cogress will commit £80 million over the next five years to fund the hotel group’s expansion into U.K. and Portuguese markets.
Since its inception in 2014, Cogress has underwritten more than £170m in 49 UK developments, with a GDV in excess of £900m.
Operator: The deal makes Cogress the exclusive funding partner of Selina, a venture capital-backed company with 128 properties in 19 countries, with a post-money valuation of US$850 million. Selina’s model requires limited capital investment for growth, with Selina opting for conversions rather than new-build developments.
“This is the biggest commitment we have made as a lender,” Cogress CEO Tal Orly said. “The scope of Selina, its growth to date, the innovation and the resilience of the model, and its potential to change not only the hospitality industry but how we view and use property is reminiscent of Airbnb. It is an opportunity very few lenders get the chance to partner on, and I was delighted that our success to date meant Cogress was in a strong position to commit £80 million over the next five years to this deal.”
Cogress plans to raise the required funds from its community of investors. The first investment opportunity is a portfolio of six hotels, including Selina’s recently launched Secret Garden site in Lisbon, Portugal, which achieved occupancy rates of 80 percent over the summer, and a 219-room site in Porto. Several of the properties will be in the U.K., including a hotel in Manchester with three cafés and two clubs, the conversion of Liverpool’s YMCA building into a 324-room hotel and a property in Birmingham’s Jewellery Quarter, which will feature a Latino bar in the basement.
This first portfolio is open but has been designed especially for Cogress’s current investor community, with a minimum investment amount of £10,000. The company expects “higher target returns than we’re likely to see in future portfolio launches.”
About Selina….in 2007 Rafael Museri and Daniel Rudasevski were living in Pedasí, a small fishing town in Panama. They ran real estate projects and while developing the town, they began to build a tight-knit social circle with locals and travellers.
The two friends had a project in mind. After travelling the world and staying in many places, they believed they could begin to change the world of hospitality and share this community with other travellers. This is how the first Selina was born in Venao, a surf town near Pedasí in 2014.
Once the model was proven to be a success in Venao, the expansion began. Selina is growing quickly in Central America, South America, North America and Europe.
THPT Comment: Interesting that this British fund, Cogress has identified Latin American brand and operator to finance, for it’s growth into Europe…just Portugal and UK?
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