How a hybrid lease creates hotel value: the Tivoli Oriente case

<p>A lease can do more than collect rent. It can create value across an entire hold.</p><p><br /></p><p>Adrian Flück co-heads hotel investment at Invesco Real Estate, which owns 34 hotels across Europe, every one held on a lease rather than a management agreement. Using the Tivoli Oriente in Lisbon as a case study, he unpacks a 2019 sale-and-leaseback with Minor Hotels, a hybrid lease that pairs a minimum guaranteed rent with a turnover top-up, and a two-phase refurbishment that lifted rate and performance.</p><p><br /></p><p>What you will take away:</p><p>- Under a lease the tenant carries the operating company and the staff, the landlord carries the building, the rent and the turnover.</p><p>- A hybrid lease protects the downside with guaranteed rent while a turnover top-up shares the upside.</p><p>- The demarcation list ends the who-pays fight, here close to fifty-fifty, by splitting refurbishment between the FF&amp;E reserve and the landlord's technical works.</p><p>- ESG becomes real when you collect 100 percent of energy data and benchmark it with BREEAM and GRESB.</p><p><br /></p><p>"It will not change your ADR, but it helps with your tenant engagement and your employee satisfaction."</p><p><br /></p><p>Inside Hotel Asset Management, for hotel owners, investors and asset managers, and for students weighing a career in the field.</p><p><br /></p><p>Watch on YouTube: <a href="https://youtu.be/rFoDLagqFx0">https://youtu.be/rFoDLagqFx0</a><br />Key takeaways: <a href="https://futureofhospitality.org/episode/how-a-hybrid-lease-creates-hotel-value-the-tivoli-oriente-case/">https://futureofhospitality.org/episode/how-a-hybrid-lease-creates-hotel-value-the-tivoli-oriente-case/</a><br />More from Inside Hotel Asset Management: <a href="https://www.youtube.com/playlist?list=PLXd-mdvWGkso">https://www.youtube.com/playlist?list=PLXd-mdvWGkso</a></p><p><br /></p>