Germany’s A&O Hotels and Hostels is moving into Manchester with the freehold acquisition of two adjoining hotel properties, the 164-room Novotel Manchester Centre on Dickinson Street and 127-room Ibis Manchester Centre 96 Portland Street.
Ares Real Estate and EQ Group are the sellers, and A&O Holding GmbH & Co. KG. is the new holding company.
A&O acquired both hotels as part of a 21-property portfolio deal in May 2024 via its division Ares Real Estate. As part of the transaction, Ares acquired the entire United Kingdom hotel portfolio and operating platform of London-based Land Security Group, most often referred to as Landsec for £400 million ($539.5 million).
In a news release Thursday, A&O said it will invest £8.2 million in transforming the two formerly leased Accor hotels into the A&O Manchester City Centre, growing the former combined room count of 291 rooms into 303 rooms with a total of 1,218 beds.
Acquisition and conversion capital derived from StepStone Group and Proprium Capital Partners, which acquired A&O Hostels in November 2023.
Since that date, A&O has acquired hotel assets for conversion to its hostel brand and business model across Europe, including in Antwerp, Brighton, Brussels, Heidelberg and London.
Last month, StepStone and Proprium bought the operations and sole hotel of Berlin-based Schulz Hotels, with its assets, management and operations rolled into A&O.
In total, the new owners have made almost $600 million of investment into A&O’s portfolio in the 25 months or so.
In November, A&O’s CEO Oliver Winter told CoStar News in “The Upgrade: Europe, Middle East & Africa Hospitality News” podcast about the company making large strides in the U.K. In October, the firm acquired the DoubleTree by Hilton, Docklands Riverside, A&O’s first location in the U.K. capital.
“We are very proud after 25 years to be coming to London,” he said, adding that the Docklands property will be “a test case for a new type of hotel for A&O … perhaps the debut of a new brand.”
Founded in 2000, A&O now has 44 hotels in 30 European cities and 11 European countries.