BUILDING HOTEL REAL ESTATE PLATFORMS

Arcus focuses on the real estate behind European hospitality: freehold hotels and resorts in established gateway cities and leisure destinations. The value of these properties rests on their location, their physical quality and a proven trading history.

Each opportunity is assessed first as real estate: location, title, building condition, permitted use, capital expenditure and the income the property can sustain. The operating model is then chosen to suit the asset. It may be a management agreement with an established operator, a franchise, a lease or a white-label arrangement.

From individual properties to an institutional platform

Hotel ownership in Southern Europe remains largely with families, independent owners and small portfolios. Many well-located properties are under-invested, or run without the systems and scale of larger groups.

Arcus brings these properties into a single framework for ownership, financing and asset management. Each property is held and financed on its own, so the platform grows one asset at a time. With scale come better financing terms, sustained investment in the properties and a wider range of exit routes.

Where an operating business adds value across the platform, for example in revenue management, distribution, procurement or shared services, Arcus may acquire it alongside the property. The core of the platform remains the real estate.

AREAS OF INTEREST

• Freehold luxury and upper-upscale hotels and resorts
• Trading hotels with an established operating history, including under-managed or under-invested properties suited to phased refurbishment while trading
• Portfolios of hotel properties
• Selective conversions of historic and landmark buildings in prime city-centre locations
• Sale and leaseback, and the separation of property from operations
• Operating companies, selectively, where they strengthen the platform

Typical parameters: established gateway cities and leisure destinations in Italy, Spain and Portugal; four-star superior and five-star; typically 80 rooms or more; €20 million to €150 million per property.

HOW ARCUS PARTICIPATES

Arcus acts as sponsor. Each acquisition is made through a dedicated Arcus-sponsored vehicle. The property is held by a single-purpose company and, where relevant, the operations sit in a separate operating company.

Arcus leads each transaction from origination to closing, covering underwriting, structuring, financing and execution. After closing it remains responsible for asset management: the business plan, capital expenditure, choosing and overseeing the operator, and refinancing. The appointed operator runs the hotel day to day.

Acquisitions are financed with senior debt secured on the property and sized on its income, alongside equity committed to each transaction.