European chain a&o Hostels has secured an €874m (£761m) refinancing facility provided by funds managed by Apollo as the chain looks to ramp up its expansion plans.
The new a&o London Docklands Riverside, the company’s first London property
The facility is secured against its portfolio of 44 hostels located across 32 European cities.
StepStone Group and Proprium Capital Partners sponsored the management-led acquisition of a&o at the end of 2023, enabling a&o to undertake an initial €500m (£435m) platform expansion programme.
The senior multi-year loan replaces an existing facility with Apollo and will enable a&o to deliver on the next, €500m phase of its ambitious growth strategy.
Over the past 24 months, the company has acquired around 11,500 beds. Recent acquisitions have included assets in Manchester, London, Berlin, Brussels, Antwerp and Heidelberg.
a&o CEO Oliver Winter
Ben Eppley, partner and head of real estate credit, Europe, at Apollo, said: “A&o has executed on its accelerated growth strategy ahead of schedule while remaining highly disciplined.
“This transaction, in a sector benefiting from attractive compelling demographic and technological tailwinds, continues our track record in Europe of providing scaled financing alongside leading sponsors seeking holistic portfolio solutions.”
Philipp Westermann, partner at Proprium Capital Partners, added: “Despite its highly defensive characteristics and outperformance in recent years, underpinned by the attractive income profile, the hostels sector remains fragmented.
“This facility provides us with the firepower to capitalise on this opportunity and rapidly scale the platform, through both asset and corporate acquisitions, alongside a long-term financing partner with a shared conviction in the sector’s fundamentals.”
The fast-growing hostel chain, with around 30,000 beds under management, was founded in 2000. Last year a&o Hostels welcomed a record 2.8 million guests and hosted 6.6 million overnight stays.
Please visit:
Our Sponsor