Queensgate Investments has purchased boutique design-led hostel operator Generator in a deal just shy of £400m (€450).
The company, which is managed by Queensgate Investments a private equity real estate fund manager, snapped up the hostel brand and its co-investment partner Invesco Real Estate, in a deal that is scheduled to be completed in May.
Generator Hostels, which was held in Patron Capital’s Fund III, owns 14 predominantly freehold properties (12 operational and two under development), located in key cities across the world, including London, Paris, Copenhagen, Amsterdam, Miami and Rome.
Racking up revenues of over €70m, Generator Hostels targets the booming millennial sector, focusing on the capital city addresses, design-led interiors, and popular social spaces.
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.
Keith Breslauer, managing director of Patron, said: “Generator has performed strongly under Patron’s ownership, during which time we have expanded the business significantly from just two hostels to 14, and have redefined the hostel concept into the design-led hospitality experience that today’s guests want. We are very pleased to have sold Generator to Queensgate, and are confident that the business will continue to grow and thrive under their stewardship.”
Jason Kow, CEO of Queensgate Investments, said: “Generator Hostels plays to Queensgate’s strengths of working with incumbent management to improve the customer experience, to streamline operations and to bolt on additional assets to this impressive platform.”