BERLIN — Pygmalion Capital Advisers is employing its funds to help hotel owners experiencing non-performing loans to realize the potential of their assets.
During an interview at the International Hotel Investment Forum, Christophe Beauvilain, Pygmalion's founder and managing partner, said his company looks at hotels with a price range of between 30 million euros ($32 million) and 50 million euros.
The firm, which has offices in Barcelona and London, also completes portfolio transactions and has a couple it is analyzing now.
Beauvilain said the company’s focus largely has been on special-situations assets since the Great Recession, but not all distress in Europe is evident.
“It depends on what your definition of [distress] is? If you are tracking what the main brokers are selling … the last two years basically valuations have been staying extremely high, but I would argue that when you are a hotel owner in a distressed situation, it is very unlikely you are going to appoint one of the main brokers. … Those type of transactions tend to be below the radar screen,” he said.
“The European banking authorities are forecasting that this is actually going to carry on growing because you have had two years of financial stress in the system, and it just doesn’t disappear,” he added.
The model of institutional, low-cost capital focused on leases has been rocked by the last couple of years, Beauvilain said. The lack of international-branded hotel offerings in some European cities allows companies such as Pygmalion room to move and opportunities to grow between that supply and the guest demand for them.
“If I look at comp cities such as Barcelona or Venice, where often there are moratoriums in building new hotels, it creates an interesting imbalance,” he said.
Pygmalion’s portfolio includes nine hotels in Spain with a total of approximately 1,650 keys.
He added Spain and Italy were the most interesting markets, but since the pandemic, all of Europe has become attractive.
For more of Beauvilain’s insights and comments, watch the video above.