Hostels are safe as houses for fund spending €450m

The Times
Generator Hostels, which has more than 8,600 beds throughout Europe, has been bought by Queensgate Investments

One of Europe’s leading hostel chains has been sold in a €450 million deal.

Generator Hostels has been acquired by Queensgate Investments, a private equity property fund, almost a decade after it was first bought by Patron Capital. The deal is expected to close in May.

When Patron bought it, Generator had only two properties, in London and Berlin. Now the group has more than 8,600 beds in locations including Paris, Copenhagen and Amsterdam. It also has a site in Miami.

Queensgate said that the purchase was a long-term investment and that it would spend “in excess of €300 million” on buying more properties. “Generator Hostels targets the fast-growing sector of millennial customers, focusing on the best capital city addresses, design-led interiors, a safe environment and, most of all, attractive shared social spaces,” it said.

According to the fund, Generator makes annual revenue of more than €70 million.