29.08.2023
“Investing in hotels can protect against inflation as revenue per room can be adjusted accordingly, provided demand remains strong,” says Christoforos Papachristophorus .
Managing Director and Founder of Invel Real Estate , a company that has become one of the most successful real estate investments in Southern Europe, talks about Invel’s investment path and plans for the future. It also talks about an asset-independent investment philosophy and explains how current circumstances are affecting the office real estate market.
Below is an interview with Christophoros Papachristophoros :
In 2013 you founded Invel Real estate . What can you tell us about the company’s investment path over the past 10 years?
Invel Real Estate was founded in 2013 as a private real estate investment company to take advantage of opportunities, mainly in Southern Europe, which was facing a sovereign debt crisis and a banking crisis.
Invel is asset independent, which means we will invest in any real estate asset class if we believe there is an opportunity to allocate capital at an attractive price while unlocking and increasing value.
Our main philosophy is to always have full alignment of interests with our investors, which is why we invest with them at significantly higher rates than with other general partners.
We are also very selective in executing transactions, which are primarily off-market due to our established and dominant presence in the markets in which we operate.
Вillion worth of funds on behalf of blue chip investors in 20 deals with an average gross return of around 20%.
Invel , Prodea Investments and Cypriot group YODA Ioannis Papalekas are strategic partners and have a joint investment company called Mediterranean Hospitality Venture ltd . Tell us more about the hospitality industry and your plans.
MHV Mediterranean Hospitality Venture Ltd focuses on luxury real estate. It was founded in 2020 at the height of the pandemic as it identified investment opportunities in the hospitality industry.
During this short three-year period, MHV shareholders and management actively worked together to reposition the existing portfolio of five hotels in Greece and Cyprus, modernizing the offering, introducing new concepts and internationally branded food products, improving ADR and optimizing EBITDA .
In addition to MHV , Invel and Prodea jointly own 12 other hotel properties with a total of over 1200 units, mainly in Greece, Cyprus and Italy.
Hotels can hedge against inflation because, in theory, RevPAR (revenue per available room) could adjust upwards as long as demand remains strong to offset rising costs. In addition, the hospitality industry appears to be on the path to a full recovery.
Since the pandemic, people have redefined their life priorities, looking for a better work-life balance, and vacation and travel spending has increased.
Remote work also means that people can work using alternative housing, so this industry continues to be an interesting investment opportunity.
Since there is a reduction in the supply of commercial offices in Cyprus, can we expect more investment from Invel in this area?
Let me first make two brief remarks about office rollouts that need to be reviewed internationally after the pandemic.
First, remote work brought new data. In large US cities, most of the suburban population prefers to work from home, so office space is not needed. In small towns in Southern Europe, visiting the office is a part of a person’s social life and is actively practiced.
Secondly, even in the latter case, when the demand for office space is still high, the shape of the buildings in demand has evolved towards high quality in terms of energy efficiency and environmentally friendly design.
Оpportunities in this area both in Cyprus and in Italy, as well as in Greece, where Prodea is the largest investor in green offices.
As you rightly noted, the office tower The Landmark is part of MHV’s multi-million dollar renovation of The Landmark Nicosia .
LEED Gold certification , which means lower energy and water consumption, as well as reduced CO2 emissions , as well as a healthier working environment and higher productivity through improved indoor air quality, abundant daylight, and interior finishes that are free of harmful chemicals. chemical substances.
What are your future goals for invel Real Estate and how do you see the development of the company in the coming years? Will we see your investment strategy expand beyond Southern Europe?
We will work step by step to unlock the value of our existing portfolio, while at the same time we will selectively make new investments in markets where we already have or plan to have a local presence, namely Greece, Italy, Cyprus, and Spain .
We expect that the current environment of rising interest rates and rising construction costs, coupled with prevailing geopolitical risks, will allow groups like ours to use capital to create attractive opportunities.
