Spanish youth hostel group Room00 Next Gen Hospitality is set to enter the UK market with plans to acquire up to five sites in London.
Room00 Casa Gracia, Barcelona
The company expects to invest between €50m (£43m) and €80m (£69m) in opening hostels in Bloomsbury, Paddington, St Paul’s and Victoria, totalling around 220 rooms.
The plans form part of a wider expansion strategy to add 20 new sites and more than 1,400 rooms across Spain, Italy, Portugal and the UK, as the group aims to reach 200 properties and 15,000 rooms over the next four years, backed by a €400m (£346m) funding round led by King Street.
“London is one of the most attractive urban hospitality markets in the world and fits perfectly with our model,” said Kaho Ha, chief investment officer of Room00.
“The city combines strong international demand with neighbourhoods that have a very distinctive identity, something that aligns closely with the way we develop each asset.”
Room00’s investment strategy will focus on the acquisition and repositioning of urban hospitality assets. Specifically, 80% of the capital will be allocated to the purchase of hostels and hotels already in operation, while the remaining 20% will be directed towards developments in prime urban locations.
“Of the total planned investment, around 80% is already in advanced stages of execution, including assets under exclusivity agreements or in due diligence processes, while approximately 30% of the pipeline has already been secured,” said Ignacio Requena, chief executive of Room00.
He added: “This level of progress provides strong visibility over capital deployment and the transaction timeline for the year.
“We are currently at a very interesting moment to invest in urban hospitality in Europe. There is a clear opportunity to reposition well-located assets and adapt them to new travel patterns.”
The company operates several brands including Room00 Hostels, TOC Hostel, Room Select Hotels and LETOH LETOH, the group’s lifestyle brand focused on wellbeing and experiential travel.
Room00 currently has more than 65 operational or in-development assets and over 3,000 rooms across Spain, Italy and Portugal.
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