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Portfolio developments 2016 in perspective

Diversification guidelines and investment restrictions

During the financial year, the Fund adhered to its diversification guidelines and investment restrictions.

Diversification guidelines and investment restrictions

Current portfolio


≥ 80% of investments invested in low or medium risk categories



≥ 50% of the forecast rental income is fixed



≥ 50% of investments in the Amsterdam/ Schiphol area



< 20% invested outside of the Amsterdam, Rotterdam, The Hague and Utrecht area



> 50% in strong international brands/ operators (*)



> 70% in 2, 3 and 4-star segments strong international brands/ operators (*)



> 75 rooms per hotel, on average more than 100 rooms



Investments, divestments and redevelopments

In 2016, the Hotel Fund consisted of five assets with a total asset value of € 185 million at year-end 2016. This is including € 16 million investment properties under construction. The total future commitments of the projects amounted to € 58 million.

  • Four star hotel on the highest floors of WTC The Hague Beatrixkwartier: NH Hotel Prinsenhof, with 204 rooms, restaurant, bar and congress facility; 

  • Combined hotel and student accommodation in Amsterdam East: CASA 400, with 520 rooms (hotel rooms and student housing), restaurant and bar, congress facility, car park and student lounge;

  • Trendy 4-star design hotel on the IJdock in Amsterdam: Hotel Aitana, with 284 rooms, restaurant and bar, congress facility and fitness centre; 

  • Hostel located to the east of the city centre of Amsterdam: Stayokay Hostel, with 112 rooms, restaurant, bar and congress facility.


In 2015, the Fund signed a turnkey purchase agreement for Meininger Amsteltower with seller Provast (Amsterdam, three-star segment hostel, 186 rooms). At the same time, the Fund signed a long-term lease (25 years) with a fixed rent with tenant Meininger. Completion of the hotel is expected in Q4 2017 and forward funding started in Q4 2015.

The Fund examined a wide range of potential new investments in 2016, and this led to three transactions last year:

  • the Fund signed a turnkey purchase agreement for Hotel Premier Suites Hourglass in Amsterdam Zuidas (extended stay 115 rooms) with seller Sax, and closed a long-term (20-year), fixed-rent lease with tenant Premier Suites. Completion of the hotel is expected in Q1 2020 and forward funding is expected to start in Q3 2017. 

  • the Fund signed a Head Of Terms for extended stay accommodation (82 rooms) in Amsterdam Houthavens in December 2016 with the consortium Boot&Co. The Fund has signed a long-term (25-years) lease agreement will be concluded with tenant City ID Group. Completion of the hotel is expected in Q4 2018.

  • The Fund acquired Stayokay Hotel Amsterdam (hostel, 112 Rooms) from seller Stichting N.J.H.C. Beheer. A long-term lease agreement (25-years) is concluded with tenant Stayokay. The transfer date of this existing hotel was 9 December 2016.


No divestments were planned for 2016 and none were executed.


The Fund had no exposure to any redevelopment in 2016. The Fund has set up a Hotel Development subsidiary to execute any possible future redevelopments.

Optimising the risk-return profile

Key factors that play an important role with regard to the risk-return profile of the portfolio are: 

  • Asset (e.g. maintenance and age of constructions and FF&E, look and feel)

  • Market (e.g. market purity, competitiveness, market position, regional economic development and prognosis)

  • Brand (e.g. distribution mix, top/bottom-line results, volatility of profit and rental guarantees)

These indicators form the foundation of the risk-return model, which is the basis for acquisitions and annual hold/ sell analyses.

Because the return on an investment in hotel real estate is strongly dependent on the operational result of the hotel business, the Fund uses the following guidelines to manage the risk of disappointing hotel operations and any negative impact on the Fund’s return.

  • The Fund prefers to invest in hotels managed by management companies operating in multiple countries/regions. 

  • The location of the hotel remains a key factor. Hotels in good locations are never vacant.

  • The hotel should attract a healthy mix of leisure and business guests. A hotel that serves both of these target groups has the advantage that it tends to achieve good occupancy levels during the week and at weekends. On top of this, the private market is less sensitive to economic developments (especially as far as hotels in the city are concerned). 

  • The Fund aims for portfolio diversification by investing in different and distinctive concepts that focus on specific target groups. For instance, budget hotels for groups, young guests and families (Meininger). Hotels and extended stay accommodation for young professionals who regularly travel for their work and stay in a city for between five nights and 12 weeks (Premier Suites Hourglass at Amsterdam Zuidas and Hotel Boot&Co at Amsterdam Houthavens).

  • Hotels and extended stay accommodation for young professionals who regularly travel for their work and stay in a city for between five nights and 12 weeks (Premier Suites Hourglass at Amsterdam Zuidas and Hotel Boot&Co at Amsterdam Houthavens). 

  • Strong guarantees from lessees provide additional security.

  • The Fund cooperates with professional management companies.

  • The Fund supervises and exerts as much influence as possible on (reserves for) lessee’s effective upkeep of the hotel’s fixtures and fittings (FF&E). 

  • The Fund aims to generate a substantial share of its hotel income – at Fund level – from long-term lease agreements with fixed, index-linked rents (minimum 50% of the total rental income on fund level), so that the operating risk is not borne by the investor. Nonetheless, in the case of variable rents the operating income may affect the direct return, although it can also lead to a higher return. This risk is mitigated by investing in hotels with a proven track record and effective support in the form of specific hotel expertise, especially during the acquisition phase, as well as by further increasing the Fund management’s own knowledge. It should be noted with regard to the Fund’s growth target that there is a growing shift away from fixed rent leases, especially for the best hotel propositions.  To be able to continue to acquire the best hotel propositions, the Fund will consider accepting variable rents for some acquisitions. Although this may lead to more rental income fluctuations at asset level, the composition of the portfolio currently provides a good deal of stability, as all the hotels in the Fund, including the transactions realised in 2016, involve fixed, annually indexed rents. 

  • During regular consultations with the hotel operator, the Fund’s management discusses the trends and developments in the hotel market and the operator can explain how it plans to respond to these trends and developments.

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