Bridges sells innovative green hotel Qbic to Cerberus Capital Management
Bridges Fund Management (“Bridges”), the specialist sustainable and impact investor, and Cerberus Capital Management, L.P. (“Cerberus”) today announced the sale of Qbic Hotel to an affiliate of Cerberus.
Bridges first invested in Qbic in 2012, via its Sustainable Growth Fund III. This investment allowed for the transformation of a disused 56,000 sq. ft. office building in the Whitechapel district of London into a stylish boutique hotel, offering 171 rooms of affordable accommodation to travellers from as little as £69 per night.
Qbic is based around the innovative ‘Qbi’ concept, reducing both the time required and the environmental impact of the hotel build process. Developed in Amsterdam, ‘Qbi’ is a pre-fabricated bedroom made primarily from recycled materials that can be installed within an existing structure. Qbic has subsequently introduced various sustainability features within the hotel, including solar panels, LED and energy-efficient lighting, and water-saving measures.
Since opening in 2013, Qbic has enjoyed consistent year-on-year revenue growth; trading for the first quarter of this year was up 11 percent on the equivalent period last year. It has also maintained a top 10 percent ranking on TripAdvisor, and in 2016, received a Trip Advisor GreenLeaders Platinum Award.
At the time of Bridges’ investment, Whitechapel was one of the 2 percent most underserved areas of the UK. Qbic has since drawn thousands of visitors to the area, paid out nearly £3m to local suppliers, created nearly 50 jobs, and actively supported local charities.
Julie Fawcett, Managing Director of Qbic, said:
“Qbic has thrived under Bridges Fund Management progressing from a start up with potential to a tested, fully fledged hotel concept with the team to make it fly. Our eco-friendly, design-led and affordable brand proposition has demonstrated consistent above market KPIs and margins supported by the Qbi integrated bed and bathroom unit. The Qbi’s crowd pleasing, quirky design hides a hyper-rational low-cost real estate conversion solution that fits with Cerberus’ vision for the brand’s expansion in the major markets of the U.K. and Europe.”
Ian Taylor, Investment Director of Bridges Fund Management, said:
“The success of Qbic has shown that by focusing on environmental impact – both during the build process and in their ongoing operations – hotels can not only reduce costs but also create a brand with a real commercial advantage. Qbic has been a hugely positive force for good in Whitechapel, attracting tourism, creating local jobs and supporting community projects. We hope it continues to go from strength to strength.”
Lee Millstein, Global Head of Real Estate, Cerberus Capital Management, said:
“Qbic Hotels is a forward-thinking, eco-conscious, urban 3-star-plus hotel offering that can act as a disruptive player in the limited service hotel space in Europe. This transaction represents an opportunity for us to work closely with Qbic Management while also applying our substantial experience in the global hospitality sector to a new growth platform. Together, we plan to create long-term value in the business through creative real estate solutions and by organically scaling the platform and portfolio across multiple cities.”
KPMG Corporate Finance advised Bridges on the sale, while Addleshaw Goddard provided legal counsel.
About Bridges Fund Management
Bridges Fund Management (formerly Bridges Ventures) is a specialist fund manager focused exclusively on sustainable and impact investment, with offices in New York and London. Since 2002, the firm has raised over $1bn to invest in high-impact SMEs, properties and social sector organisations that are helping to solve some of society’s biggest challenges. It focuses on four key impact ‘themes’: health & wellbeing, education & skills, sustainable living and underserved markets. The Bridges Social Impact Bond Fund is the world’s first fund dedicated exclusively to investing in outcomes contracts.
About Cerberus Capital Management, L.P.
Established in 1992, Cerberus Capital Management, L.P. is one of the world’s leading private investment firms. Cerberus has more than US $30 billion under management invested in three complementary strategies: global credit opportunities (which includes non-performing loans, corporate credit and distressed debt, mortgage securities and assets, and direct lending); private equity; and real estate. From its headquarters in New York City and network of affiliate and advisory offices in the U.S., Europe and Asia, Cerberus has the on-the-ground presence to invest in multiple asset classes globally.