News: A&O Hostels secures €874m Apollo refinancing for expansion — IPE Real Assets
London, ENGLAND (Media Report) -- StepStone and Proprium Capital Partners-owned European hostel chain A&O Hostels has secured an inspiring €874m refinancing facility from Apollo, marking a powerful milestone in the next chapter of its growth journey.
The financing, secured against A&O's portfolio of 44 assets across 32 vibrant European hubs, will fuel the firm's ambitious vision to double its portfolio within the next five years.
StepStone and Proprium Capital Partners backed the management-led acquisition of A&O at the end of 2023, empowering the firm to launch an initial €500m platform expansion programme and setting the stage for sustained, long-term growth.
The senior multi-year loan replaces an existing facility with Apollo and will enable A&O to confidently advance the next €500m phase of its growth strategy in its core markets, building on strong momentum and a clear strategic vision.
Josh Cleveland, Head of EMEA at StepStone Real Estate, said: "Owners and the management team have built something exceptional at A&O, growing the platform at pace while maintaining real discipline. Apollo's commitment to extending this relationship on competitive terms is a strong endorsement of the strategy – and of the partner group delivering it."
Philipp Westermann, Partner at Proprium Capital Partners, said: "Despite its highly defensive characteristics and consistent outperformance in recent years, underpinned by an attractive income profile, the hostels sector remains fragmented and full of untapped potential.
"This facility provides us with the firepower to capitalise on this opportunity and rapidly scale the platform through both asset and corporate acquisitions, alongside a long-term financing partner with a shared conviction in the sector's fundamentals."
Ben Eppley, Partner and Head of Real Estate Credit, Europe, at Apollo, said: "A&O has delivered on its accelerated growth strategy ahead of schedule while remaining highly disciplined and focused on quality.
"This transaction, in a sector benefitting from attractive compelling demographic and technological tailwinds, continues our track record in Europe of providing scaled financing alongside leading sponsors seeking holistic portfolio solutions."
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