Hetherley Capital Partners (HCP) has announced the conversion of the 307-room Travelodge Hotel at Heathrow to an Ibis Budget.
Owner and investor HCP will asset manage the property under an agreement which it believes to be the first of its type, with the group rewarded when the hotel returns to its pre-covid value.
Accor will manage the property under a 25 year agreement. The hotel is temporarily closed during the transition and will reopen under its new identity next month.
HCP is looking to add further hotels under the new structure. Charles Scudamore, CEO & founder, HCP, said: “The pandemic saw many owners drawn closer to hotel operations than they were comfortable with. We are offering them the chance to step back while we take care of the day-to-day issues of hotel ownership, but with the shared goal of recovering both profits and value.
“There are a number of owners who may have decided to stick with a particular brand while the sector was locked down, but who are now feeling more confident in the market and reconsidering, looking for an alternative model which fits in with their investment targets.
“Institutional investors came to the sector looking for an attractive hedge for the other asset classes in their portfolios, without having to participate in the minutiae of hotels and we can offer them a return to that reassurance.”
HCP is brand agnostic. Scudamore said: “We have worked with the leading brands in the market and believe that each property comes with its own requirements, depending on the location and target market.”
Founded in 2012, HCP partners with private and institutional investors, including Land Securities, for whom it oversees a 21-strong portfolio of hotels (3,766 bedrooms) under Accor brands. The team has over 25 years’ experience in the sector, with expertise including acquisition and deal origination, investment, operations and asset management. HCP believes in true alignment with the owner, both through equity investment in the managed portfolio and a separate owned portfolio.
The group is focused on established UK markets, looking for branded hotels with more than 150 bedrooms. HCP has a hold time of three to five years, with targeted levered IRR of 15% to 20%.