Oberland – New Hotel Investment Company Secure Funding
Location/s: Major UK cities (London, Edinburgh, Bath, Oxford, Cambridge) and top markets in Western/Northern European countries, good links to transportation and food and drink outlets – London broader outlook …i.e. Greater London
Size Required: Typically a current 75-175 key hotel, from hostel to tired 3/4* hotels in need of extensive work. Oberland has a small room concept, thus prefers semi-flexible floorplates and unlisted buildings, but would ultimately consider most/all opportunities. Ground floor public area required.
Budget: Building as is £10m – £40m
Buy/Lease: Buy – see below re Swiss funding
The Brief:
Oberland made the news earlier this year, with their launch supported by a significant, Swiss asset manager, Swiss Finance & Property and is founded by William Riordan and Andrew Dean.
Oberland is built to professionalize and institutionalise the European 3-star hotel market by taking advantage of the unprecedented disruption of the sector and the structural imbalance of supply and demand driven by rapidly evolving consumer tastes and preferences. Oberland aims to add significant value to existing hotels (or sites with simple/easy planning conversions).
The duo, William Riordan and Andrew Dean have a strong background in finance, investment and operations, from organisations like Value Retail, EQT Exeter and PwC.
Riordan and Dean said that after a slow period at the start of 2022, more buying opportunities are now starting to appear in the hotel sector.
“There was a theory at the start of Covid that there would be a wave of stock coming onto the hotel market, but a friendly lender environment and government support meant that isn’t happening,” said Riordan.
“Now owners have eaten through their capital reserves, if the boiler breaks there is no money to fix it,” said Dean. “People have been working seven days a week and they’re tired. We’re starting to see people looking to partner with us, and we want to buy assets, put equity in and renovate.”
The fact that the cost of borrowing has risen would also throw up interesting opportunities, Dean said.
The pair said the company is looking to build up a portfolio of assets in the €20M-€30M price bracket, targeting hotels of around 125-150 rooms.
Big European cities like London and Paris would be a focus, but it would also look at interesting, second-tier cities that travellers are increasingly seeking out. Oberland is looking to buy architecturally original buildings to make each of its hotels distinctive, the pair said.
It may buy some assets with Swiss Finance & Property, but is not working with the firm exclusively. Rather than raising a fund, it is buying hotels on a deal-by-deal basis.
The unique nature of the European hotel market offers good potential for the right company and the right brand, Riordan said.
The planning regimes in historic city centres make building new hotels difficult, meaning renovating older properties is a good entry point.
And 60% of the hotels in Europe are unbranded, compared to the U.S. and Asia where 80% of the hotels are branded, providing a good opportunity for those that can get the brand right.
“Millennials and below are the biggest generation of travellers we’ve ever seen, but they only have a small proportion of the wealth in the West compared to previous generations,” Riordan said.
“They’re not affluent, but they have standards; they know what cool is, they have it plugged into their brains via social media every day. There are a lot of great four- and five-star brands out there offering experience, but they are out of reach.”
Riordan and Dean said the proposition would involve paring back the rooms, getting rid of the furniture in a hotel room that no one ever uses, and providing rooms that offer a good bed and shower, strong WiFi, and are clean and well-designed.
On top of that, Oberland’s hotels would have inviting common areas like bars and restaurants, places where guests would want to spend their time.
Flag & Management: Flag and management free, or able to break within 12 months
History: As above
Main Photo: The style of hotel Oberland would like to end up with
Funding: Extensive range of HNWI and established funds. For the right deal, could be all cash buyers
Development Appetite: Happy to taken on full refurb….but prefer not ground-up development
Date Posted: October 2022
THPT Comment: Two highly focused individuals, with the backing of a serious Swiss investment fund and a clear idea of what they would like Oberland to be….
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