BlackRock just checked into the European hostel business.
The institutional investor acquired a 100 million pound pan-European hostel portfolio through a joint venture with operator Amistat International, IPE Real Assets reported. That’s roughly $127 million.
“This transaction represents an opportunity to gain early-mover access into an increasingly institutional but undersupplied asset class,” said Thomas Mueller, BlackRock’s European head of value-added real estate. “The demand profile for hostels is particularly appealing given the lack of modern, quality stock in the market, which is characterized by fragmented ownership and very low brand penetration.”
Amistat operates hostels with both shared and private rooms, cooking and dining areas and workspaces.
Frank Orentstein, chief investment officer and partner at Amistat, described his company’s hostels as “stylishly-designed, safe and tech-infused social hubs.”
Orenstein said Amistat targets young travelers for whom “the living-like-a-local experience is gaining more and more importance.”
The move comes as BlackRock is looking to diversifying its products. In March, the giant asset manager acquired a real estate analytics firm, eFront, for $1.3 billion. [IPE Real Assets] – Mike Seemuth