The Future of Hospitality
How a hybrid lease creates hotel value: the Tivoli Oriente case
A lease can do more than collect rent. It can create value across an entire hold. Adrian Flück co-heads hotel investment at Invesco Real Estate, which owns 34 hotels across Europe, every one held on a lease rather than a management agreement. Using the Tivoli Oriente in Lisbon as a case study, he unpacks a 2019 sale-and-leaseback with Minor Hotels, a hybrid lease that pairs a minimum guaranteed rent with a turnover top-up, and a two-phase refurbishment that lifted rate and performance. What you will take away: - Under a lease the tenant carries the operating company and the staff, the landlord carries the building, the rent and the turnover. - A hybrid lease protects the downside with guaranteed rent while a turnover top-up shares the upside. - The demarcation list ends the who-pays fight, here close to fifty-fifty, by splitting refurbishment between the FF&E reserve and the landlord's technical works. - ESG becomes real when you collect 100 percent of energy data and benchmark it with BREEAM and GRESB. "It will not change your ADR, but it helps with your tenant engagement and your employee satisfaction." Inside Hotel Asset Management, for hotel owners, investors and asset managers, and for students weighing a career in the field.
