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<\/p>\nCEO of UK-based investor talks luxury development and
\nother opportunities for the active European investor. <\/p>\n
JERSEY, U.K. \u2014 The luxury segment has been underdeveloped in Spain
\nand Saul Goldstein sees a golden opportunity to cater to this growing demand
\nsector.<\/p>\n
\u201cThere has been less luxury development in Spain as it has historically
\nbeen more of a mid-market destination,\u201d said Goldstein, a founder and CEO of
\nJersey, U.K.-based real estate investment manager ActivumSG. \u201cThe existing
\ntourism infrastructure means it is well-placed to absorb increasing demand from
\ntourists who are seeking luxury properties.\u201d<\/p>\n
This is partly due to longer summer seasons, Goldstein said, but also
\nbecause hotel owners and operators are expanding their amenity and service
\nofferings to cater to this growing segment of the market.\u00a0Count ActivumSG
\namong that group as the company has executed on several transactions
\npost-COVID, as it eyes \u201can opportunity to capitalize on the market
\ndislocation.\u201d<\/p>\n
Goldstein uses ActivumSG\u2019s acquisition of the Nobu Hotel Barcelona as a
\nprime example.<\/p>\n
\u201cThe hotel had already been recently developed, but to drive further
\nvalue, we created Barcelona\u2019s highest rooftop pool and bar to make it an even
\nmore appealing destination for international luxury travelers, who are
\nincreasingly seeking something special and experiential in terms of their
\nhospitality choices,\u201d he said.<\/p>\n
ActivumSG, which was formed in 2007 and has directly or indirectly
\nadvised on over \u20ac10 billion in real estate and real estate-related investments
\nsince then, primarily sits on the opportunistic end of the acquisition
\nspectrum, according to Goldstein. That often means getting involved with
\ndistressed assets.<\/p>\n
\u201cWe look to profit by acquiring, developing, or redeveloping assets in
\nexcellent locations,\u201d he said. \u201cWhile taking on value-add risk and utilizing
\nmoderate leverage, there can sometimes be an element of distress to the deals
\nthat we do, where an owner is facing issues in the capital structure or
\ngenerational transition.\u201d<\/p>\n
After acquiring the asset, ActivumSG typically gets involved in asset
\nmanagement initiatives done by its team, according to Goldstein.<\/p>\n
<\/p>\n
We are open to executing across Western Europe and expect to be active this year due to the favorable market conditions we are currently seeing from a buyer\u2019s perspective. Watch this space\u2026<\/p>\n
Saul Goldstein<\/p>\n
\u201cThe asset\u2019s location, alongside continued asset management initiatives,
\nwill then be what drives growth in the long term,\u201d he said.<\/p>\n
While Goldstein said Spain has been a major investment focus lately, he noted that ActivumSG isn\u2019t necessarily tied to one particular geography.<\/p>\n
\u201cWe are open to executing across Western Europe and expect to be active
\nthis year due to the favorable market conditions we are currently seeing from a
\nbuyer\u2019s perspective,\u201d Goldstein said. \u201cWatch this space\u2026\u201d<\/p>\n
Hotel Investment Today spoke with Goldstein via an email Q&A about
\nbifurcation in Europe, partnering with Ennismore and the company\u2019s acquisition
\nof Odyssey Hotel Group. His answers were edited for length and clarity.<\/p>\n
Hotel Investment Today (HIT): In the U.S., we have been
\nwitnessing a significant bifurcation in the hotel industry. Is it different in
\nEurope?<\/b><\/p>\n
Saul Goldstein:<\/b> The luxury segment of the market
\ncontinues to demonstrate resilience in Europe, with some regional
\nvariations.\u00a0Spain, for example, has had a well-established mid-market
\noffering with strong existing tourism infrastructure for quite some time;
\nhowever, the luxury segment remains underdeveloped in comparison to many other
\nEuropean countries. At the same time, the country\u2019s favorable climate,
\nagreeable lifestyle, heritage, and ease of access to other European
\ndestinations mean that luxury travelers are increasingly looking to Spain.\n<\/p>\n
Here, ActivumSG sees a real opportunity to cater to this growing demand
\nin the sector, which is also reflected in investor preferences. Recent market
\ndislocation has provided us with the opportunity to acquire, develop, and
\nredevelop well-located assets with sound fundamentals at highly attractive
\ndiscounts to peak pricing and\/or replacement costs.<\/p>\n
The story of the economy (or budget) segment in Europe is a bit more
\nnuanced. The middle service level has faced difficulties, but the ‘cheap and
\ncheerful’ segment offers a real opportunity. The lower-end, limited-service
\npart of the market is less developed in Europe than it is in the U.S., which
\nmakes it interesting.\u00a0For example, the tech-enabled serviced apartment
\nmodel offers the prospect of high operating profit margins alongside reliable
\nuser experiences that cater to a diverse range of travelers and consumers.
\nDespite this, a lack of high-quality investable stocks remains in this
\nattractive sub-sector in Europe. This won\u2019t be the case for very long, and we
\nexpect to be active in this regard in the near future, starting in Germany.<\/p>\n
![\"Activum's](\"https:\/\/ik.imgkit.net\/3vlqs5axxjf\/HIT\/uploadedImages\/Articles\/News_Articles\/Development\/Owners\/SLS%20Barcelona.png?tr=w-1024%2Cfo-auto\" "\\"Activum's")
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