Between 11 and 12 September, more than 1,000 senior representatives from across the UK hospitality industry will head to Manchester for the Annual Hotel Conference (AHC).
This year’s speakers include: broadcaster and chef patron at La Gavroche Michel Roux Jr as well as senior representatives from Blackstone, Whitbread, KSL Capital Partners, and more.
The following interview is part of a series aimed at bringing you a flavour of the conversations you can expect on stage, highlighting some of the big-picture trends and themes ahead of the event.
Register now to make sure you don’t miss out.
Like many investors Deutsche Finance International has had to play a waiting game this year when it comes to acquisitions - at least in the hospitality sector. That doesn't mean that the company isn't interested in the sector as Francesco Orofino, investment vice president and head of hospitality at the company explains in our interview below.
You can catch Orofino at the AHC speaking on the Capital Talks panel.
Hospitality Investor: It's a tough market out there for deals. How are you dealing with the lack of transactions?
Francesco Orofino: Patience. While we are ultimately paid to deploy like most in our competitive set, I can say that I am proud about the degree of discipline that we have shown as a team throughout these last few years; we are laser focused on protecting our track record and hence not rushing into deals for the wrong reasons. With that said, we have found value in the UK industrial sector, and have launched an urban logistics platform earlier this year, with the acquisition of two seed portfolios.
Hospitality Investor: Despite the lack of assets on the market, Deutsche Finance International has closed a couple of deals in the last year. How did they come together?
Francesco Orofino: In terms of new deals (so excluding existing platforms’ add-ons) we have closed two urban logistics portfolios for a GAV of c. £200 million; these were sourced though a relationship of our group.
Hospitality Investor: It sounds like you'll be employing an active asset management strategy with your acquisition of the Sheraton Berlin Grand Hotel Esplanade. What is your thinking here?
Francesco Orofino: We are seeking to redevelop the site into a mixed use asset with a hotel component.
Hospitality Investor: Have you made any inroads in the UK market? What cities and sectors interest you?
Francesco Orofino: Our recent exposure to the UK market has been mainly concentrated in the student housing and industrial sectors. In terms of hospitality, we are developing two hotels as part of Olympia in Earls Court, a CitizenM and a Hyatt regency, both of which will be operated under HMAs. While we remain opportunistic in this market, we continue to like the select service sector in supply constrained urban centres, as well as lifestyle/luxury in London, Edinburgh, and other UK cities with a well-diversified, leisure oriented demand base. For example, we are excited about delivering the Hoxton Dublin next year; we had identified Dublin in 2019 as one of those markets with a strong fundamental / supply-demand story.
Hospitality Investor: The theme of this year's event is ‘Adapt to Thrive’, can you give me one example in your business or otherwise, where a new and innovate strategy has been implemented to capitalise on an emerging market opportunity?
Francesco Orofino: The greatest business change I’ve experienced at DFI relates to our growing focus on ESG, which today permeates each and every aspect of our investment supply chain, from investment strategy to due diligence and reporting; we have hired in-house experts to assist us with the transition, and rely on many other third party consultants to educate and advise us on the execution of ESG business plans across hotels, living, industrial, and office. As part of a recent hotel transaction in which the target asset required a light touch refurbishment, we hired a sustainability expert to work in conjunction with our technical lead advisor in order to identify and quantify ESG initiatives to integrate as part of our business plan, including minimising the hotel’s carbon footprint as well as tracking ESG related data, which we believe is now necessary to prepare for an institutional exit.
Francesco Orofino, investment vice president and head of hospitality at DFI, will be speaking on a panel entitled: Capital Talks: Leading the Way in a New Hospitality Investment Landscape at this year's AHC.
Stay tuned for more preview interviews and if you still haven’t registered yet, you can do so here. You can also view the latest programme, here.