Societe Generale and HSBC in €215m Generator Hostels refinance

The two banks have provided a debt facility to back 13 properties across Europe, recently acquired by Queensgate Investments.

Societe Generale and HSBC have financed the Generator Hostels portfolio recently acquired by real estate fund manager Queensgate Investments with a €215 million loan.

The five-year facility will refinance 12 properties in the Generator portfolio based in eight countries across Europe. It will also finance the remaining development works for the Madrid hostel which is due to open this year.

Societe Generale acted as agent, arranger, lender, hedge counterparty and security agent, and HSBC as arranger, lender and hedge counterparty. Dentons advised the banks on the multi-jurisdiction transaction.

In May last year, Queensgate bought 14 hostels in the Generator portfolio from private equity property firm Patron Capital, comprising 8,639 beds spread across 12 European cities and one US city – Miami. The assets were predominantly freehold, 12 being operational and two under development.

Following the acquisition, Queensgate said it would invest at least €300 million into adding more hostel assets. At the time, the firm appointed Alastair Thomann as chief executive of the hostel chain and André Guettouche as chief operating officer. Both were previously at Penta Hotels.

Generator Hostels’ revenues are reported to be more than €70 million. The company targets the fast-growing sector of millennial customers, focusing on assets in popular capital cities.