Queensgate Acquires Generator Hostels from Patron Capital for €450m

Date: March 2017 (deal completed May 2017)

Location: Global, mainly across Europe

Name: Generator Hostels – 14 predominantly freehold assets (12 operational and two under development), totalling 8,639 beds, located in London, Paris, Copenhagen, Amsterdam, Miami, Dublin, Hamburg, Barcelona, Berlin Mitte, Stockholm, Madrid, Venice, Berlin Prenzlauer Berg and Rome.

No. of Beds: 8,639

Seller: Patron Capital’s Fund III, who acquired the concept from Bryan Duffy in 2007, with two hostels open at that time, London & Berlin. Patron is a pan-European institutional investor focused on property backed investments, and its co-investment partner, Invesco Real Estate, a global real estate manager. Patron was advised by Lazard and CMS. Invesco was advised by Freshfields.

Buyer: Queensgate Investments Fund II LP, which is managed by Queensgate Investments, headed up by Jason Kow CEO, is a private equity real estate fund manager.

Queensgate Investments intends to own the portfolio for the long term, enhance operations for customers, and invest in excess of €300m into adding more hostel assets. Queensgate was advised by Brown Ridnick.

Price: £450m

Price per bed: £52,089,262 (the beds are in rooms of 2 – 12 beds per room)

THPT Comment: Bryan Duffy really was the man that transformed the current hostel scene from it’s fuddy-duddy YHA image to the modern, funky, must-stay place that it is now, for the youth traveller. After the sale, Bryan with his son, Kingsley, set up Hostelbookers, for which Bryan is still the Chairman, in 2004.

First Seen: Patron Capital website