A&o Hostels, a hostel chain headquartered in Berlin, Germany, characterized to offer affordable, functional rooms for families, groups and young travellers across Europe has purchased two hotels with plans to convert them in hostel accommodations in Manchester, a major city in the northwest of England, a UK centre known for its rich industrial heritage, architecture, culture, musical export, media links, scientific and engineering impact, famous football clubs and excellent transport connections.
The two properties previously operated under Accor’s ibis and Novotel brands, part of Accor S.A., French multinational hospitality company based in Issy - les - Moulineaux were purchased from Ares Real Estate funds, a leading global alternative manager offering clients complimentary primary and secondary investment solutions, based in Los Angeles, U.S. and EQ Group, a leading hospitality investment and management platform headquartered in London, England, UK.
The two establishments are located in central Machester between Deensgate and Piccadilly, approximately a 15 - minute walk from Manchester’s main train station, one sutuated on Portland Street, a busy central road connecting Piccadilly to Oxford Street, known for historic warehouses, modern office blocks like Manchester One, hotels and a mix of bars and restaurants, and the other along Dickinson Street located in an urban area characterized by stylish heritage buildings and modern serviced offices close to Manchester Art Gallery and Peter Street.
The properties totalling 13.000 square metres will undergo a £8.2 million refurbishment with the aim to create 1.218 beds across 303 guestrooms, including private rooms, family rooms, and dormitories, marking a relevant expansion of a&o Hostels in the UK market.
The renovation is expected to be completed by the first quarter of 2027, with the properties remaining operational throughout the process.
This acquisition is part of a&o Hostels’s broader growth strategy, which involves a €500 million investment program. The company aims to capitalize on the increasing demand for budget accommodations driven by inbound tourism and budget - conscious travellers. The European hostel market is projected to grow at a 5.8% compound annual growth rate from 2025 and 2030.
In the past 24 months, a&o Hostels has acquired 8.500 beds through various acquisitions and refurbishments. Recent expansions include properties in Antwerp and Brussels, Belgium, London and Brighton, in the United Kingdom, and Heidelberg, Germany, as well as the acquisition of the Schulz Hotel platform, while the company continues to explore further opportunities transactions in other major European cities.
The management - led acquisition of a&o Hostels by StepStone Group and Proprium Capital Partners in late 2023 has enabled the company’s expansion and approximately €500 million has been invested in the platform’s growth over the last 18 months.
Manchester is considered a key atrategic location for a^o Hostels, given its status as one of the United Kingdom’s top performing destinations and hotel markets outside of London. The city attracts over 1.9 million visitors annually, including international tourists, domestic travellers and student groups.
The demand foir the Engkish city is fuelled by events such as Premier League fooball matches with protagonists the two local clubs such as Manchester City and Manchester United, top concerts, congresses, conferences, and various cultural and business activities.
The Manchester acquisition concludes a year of significant growth for a&o Hostels, which added approximately 5.500 new beds across four new cities and integrated the Schulz Hotel platform into its operation.
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