ECHO Partners’ strategy is based on the following key considerations and guidelines:
We invest exclusively in hotel assets in certain selected European A-Cities.
Each of our target cities is expected to face supply constraints due to a combination of a steady increase of incoming travel and local limitation of hospitality platforms (such as Airbnb) and/or the limitation of new hotel construction.
This constellation is expected to result in an increase in occupancy, higher room rates and therefore higher rental income.
For our value add strategy we target gross > 5% unlevered returns and 7-10% levered returns (cash-on-cash equity yields) on a running basis + upside from renegotiated leases and/or opportunistic exits resulting into 15-20% IRR p.a. total returns on a gross basis
For our core strategy we target a net 5-7% levered locked in returns with long-term existing contracts and lower leverage applied
The target sellers’ market with a gross asset value of EUR 10-150 million is highly fragmented, allowing ECHO Partners to consolidate hotels in one single fund with a value add and core strategy