King Street invests €400m in European hospitality platform

King Street Capital Management is investing up to €400 mln in Room00 Group, a major Southern European urban hospitality platform. 

Room00 property in Porto

This investment will fuel Room00's expansion across Europe, focusing on acquiring and managing hotels in prime city locations in Spain, Portugal, and Italy. 
The investment will mainly be used to acquire hotel properties in prime locations within cities like Madrid, Barcelona, Lisbon, Porto, Milan, Rome, and Florence.
Room00 will continue its current growth strategy based on leases and management agreements but will now also directly purchase properties, partnering with Kryalos SGR in Italy for this purpose. 
Room00's portfolio currently includes over 2,500 rooms across 50 operating or developing properties, encompassing a range of brands (Room00 Hostels, Toc Hostels, room Select Hotels, and LETOH LETOH).
The company plans to significantly expand to 200 properties and 15,000 rooms in Southern Europe, plus an additional 1,000 rooms in London (where they are currently in negotiations for their first property) within the next four years.
Paul Brennan, partner and co-head of Real Estate at King Street, said: "We view Room00 as one of the strongest, most innovative and scalable platforms in the European hospitality landscape. Its fully integrated operating model and strategic focus on prime city centre locations position it as a valuable partner for our real estate growth strategy in Europe.”
Ignacio Requena, founder & CEO of Room00 Group, added: "This investment from King Street validates our business model as the leading vertically integrated hotel operating and investment platform in the Southern European urban lifestyle hospitality industry, and will allow us to accelerate growth via acquisitions of prime real estate, attract the best talent and open new opportunities for collaboration with investors who share our long-term vision." 
Room00 received advisory services from GRC IM and CBRE Investment Banking, with legal counsel provided by Garrigues, Cuatrecasas, and Across Legal. King Street's legal advisors were Uría Menéndez and Allen & Overy Shearman. EY conducted financial due diligence, and PwC advised on tax structuring.