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A&O Hostels has acquired two adjoining hotel properties in central Manchester for an undisclosed sum as part of its expansion across Europe.
The hostel operator purchased the freehold of the four-storey buildings on Portland Street and Dickinson Street from funds managed by Ares Real Estate and EQ Group.
The properties, which together provide about 13,000 sq m of space, were previously operated under franchise agreements with Accor, trading as ibis and Novotel hotels. They are located between Deansgate and Piccadilly, around a 15-minute walk from Manchester Piccadilly station.
A&O said it plans to invest £8.2m refurbishing the buildings to create a 1,218-bed hostel scheme comprising 303 rooms. The mix will include private rooms, family rooms and dormitories. The group said works are expected to be completed by the first quarter of 2027 and that the properties will remain operational during the refurbishment.
The acquisition adds to its portfolio as it rolls out a wider investment programme across its core European markets. The group has outlined plans to deploy about €500m (£434m) as it expands its estate, targeting major cities with strong tourism demand and a growing market for budget accommodation.
Over the past two years, A&O has added around 8,500 beds across operational sites and properties under development or refurbishment. Its target customer base includes families,
Recent transactions have included acquisitions in London, Brighton, Brussels, Antwerp and Heidelberg, as well as the purchase of the Schulz Hotel platform.
Oliver Winter, CEO of A&O Hostels, said: “As one of the UK’s best performing hotel markets outside of London, attracting over 1.9 million visitors annually, we have long regarded Manchester as a key strategic target, and are therefore really pleased that we can now establish a significant footprint through this freehold acquisition.
“The transaction concludes a highly successful year for A&) Hostels which has seen us deliver c. 5,500 new beds across four new cities, as well as bring the Schulz Hotel platform into our group.”
