Starwood has told real estate investors not to shy away from the battered leisure sector, as it becomes increasingly useful as a hedge against rising inflation.
In its latest quarterly update, Starwood Real Estate Finance said it “highlighted the attractiveness of alternate real asset classes to investors”, adding that it expected inflationary pressures to continue to fuel the growing appetite for those classes that could adapt quickly to rising inflation.
The UK leisure and hotel space is a good example, where prices charged to end users can be quickly changed to reflect growing costs.
Starwood said: “We can see many examples of this, with Park Holidays, a leading UK caravan park operator, and the Pig Hotel group, which operates food-led leisure-focused hotels, both recently changing hands and a number of other UK leisure businesses expected to be sold this year.”
It added: “The ability to benefit from inflation in the top line will present opportunities to businesses like these and other operational real estate.”
Starwood is 41% exposed to hospitality and 57% invested in the UK.
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