'In the Netherlands we are currently looking at hospitality transactions,' Riccardo Dallolio, head of HIG Realty Partners in Europe, said. The target is mid-class hotels in good locations, drawing on HIG's experience in London's Docklands.

Back in September 2016 HIG sold the 378-room DoubleTree Hilton Hotel in London's Docklands area to Hong Kong-based investment manager Junson Capital. Although the investment volume was not disclosed, market watchers speculated it was around £80 mln, double HIG's initial investment.

HIG had purchased the Docklands hotel from Swedish hotel group Pandox in 2014 and undertook refurbishment of the bedrooms and common areas, and a rebranding under the Hilton DoubleTree banner. 'This transaction is a great example of HIG's value-added approach and has resulted in an outstanding outcome for HIG and its investors,' Dallolio said at the time.

In March this year, HIG sold 26 light industrial assets in the Netherlands for a rumoured €130 mln to real estate funds managed by Blackstone. HIG also retains a portfolio of offices around Amsterdam which it bought in 2014.

Dutch hotels
HIG's interest in hotels mirrors the keen interest a number of other international players are showing for the Dutch hospitality sector. In April, London-based property investment firm Avignon Capital acquired the NH Amsterdam Zuid hotel in the Dutch capital for €45 mln.

Also in April, Austrian developer IES Immobilien and Vienna-based investor group Invester United Benefits unveiled plans to invest a 'three-digit million-euro amount' in a 100,000 m2 mixed-use development in Amsterdam’s northern waterfront area. Construction is set to begin in May on the Overhoeks project, which will comprise a hotel, congress centre and residential quarter.

Around the same time French insurer AXA and Danish pension fund ATP teamed up to forward-fund the development of the 650-room Nhow Amsterdam RAI, billed as the largest hotel in the Benelux.

HIG in Europe
HIG's tastes are somewhat more moderate as the firm makes opportunistic, value-add investments in small to mid-sized real estate assets across all property types in the US and Europe, 'with a specific focus on special situations and complex transactions in the small cap space'. The average ticket size is about €20 mln.

HIG is however, no lightweight. The group manages $21 bn (€18.8 bn) of capital under management across a range of asset classes globally. HIG's European real estate business has carried out around 35 direct property, NPL and financing transactions since 2013.

The sale of the light industrial portfolio to Blackstone was the culmination of a strategy that began just over three years ago. 'We started an aggregation strategy in 2013 and acquired (the light industrial) assets, which we thought were undermanaged, during a phase in the Netherlands when yields were high and vacancy rates were also historically high,' said Dallolio.

'At the time, discussion in regards to the Netherlands was less optimistic, the economy was due to recover and its growth was lower than it is now. Today, views on the economy are much more upbeat. ‘We had the assets for approximately three years and carried out asset management before Blackstone acquired the portfolio from us.'

Other markets
Last summer, the firm picked up a 43,000 m2 light industrial compound in Kongsberg Technology Park in Norway. This was HIG's third investment in Norway, and second investment in the Norwegian industrial market.

Dallolio: 'The Nordic real estate markets represent an important part of our European strategy. Compared with the Netherlands, we employ a different accumulation strategy in Norway that focuses on larger industrial parks, which is working out really well for us. ‘We are also active in the light industrial and logistics sectors in the UK, Denmark and Sweden. In Southern Europe we are looking mainly at logistics.'

HIG has also been an active buyer of other property types in various European markets. 'The most recent markets we acquired assets in were Norway (Oslo), Spain, Denmark, Italy (Milan), France (Paris) and York in the UK. You can see from this that we are opportunity-driven, leveraging on our 25-person platform on the ground in key markets and our strong in-house asset management capabilities.'

HIG went big in Denmark in November 2016 when it acquired 76 properties from Danske Bank. The investment volume for the 115,000 m2 mix of retail, office and residential assets was not disclosed. An office asset was acquired in Oslo last March.

In January 2017, HIG acquired the 430-unit Valle Romano holiday apartment complex in Estepona - the firm's seventh investment in Spain during the last three years. There have also been recent acquisitions in Italy and France.

Mezzanine lending
In addition, HIG operates in the mezzanine lending space. In October 2016, HIG completed a structured debt investment to help York Ventures acquire the freehold interest in Yorkshire House in the North East of England. York Ventures plans to transform the city centre building into a 124 bedroom Malmaison Hotel with 49 serviced suites. The terms of the financing were not disclosed. ‘We intend to do more mezzanine lending across Europe as we already have done in Spain and the UK,' Dallolio said.

‘Ultimately our strategy is to take small, complex transactions, manage the assets and turn them into simpler, larger and more valuable assets and portfolios. Our pan-European presence gives us the ability to cherry-pick the best opportunities with potential for improvement, aggregation and successful sale.’