a&o Hostels has expanded into Manchester through the freehold acquisition of two adjoining hotel properties in the city center. The assets are located on Portland and Dickinson Streets and were acquired from Ares Real Estate funds and EQ Group. The transaction marks a&o’s fourth property in the United Kingdom and increases its European portfolio to 44 properties across 10 European cities.
The four-story buildings total 13,000 square meters and were previously operated under a franchise agreement with Accor, trading as ibis and Novotel. The properties sit between Deansgate and Piccadilly and are approximately a 15-minute walk from Manchester’s main train station. a&o Hostels plans to continue operating the buildings while undertaking a refurbishment program.
Following an ÂŁ8.2 million renovation, the combined scheme will comprise 303 rooms and 1,218 beds. The room mix will include private rooms, representing 30 percent of the total, family rooms at 30 percent, and dormitories accounting for the remaining 40 percent. The refurbishment works are expected to be completed by the first quarter of 2027 and the properties will remain fully operational during the construction period.
The Manchester acquisition forms part of a&o’s broader investment strategy, supported by a €500 million investment program focused on its core European markets. Over the past 24 months, the company has added 8,500 beds through acquisitions and developments that are either operational or under refurbishment. The strategy targets families, school groups and backpackers across multiple urban destinations.
StepStone Group and Proprium Capital Partners sponsored the management-led acquisition of a&o at the end of 2023 and have invested approximately €500 million into the platform’s expansion during the past 18 months. Recent additions to the portfolio include assets in London, Brighton, Brussels, Antwerp and Heidelberg, along with the Schulz Hotel platform. a&o also reports a near-term pipeline of additional transactions in other European cities.
“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&o 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,” said Oliver Winter, CEO of a&o Hostels.
Founded in 2000 by Oliver Winter, a&o reported welcoming 2.8 million guests and recording 6.2 million overnight stays in 2024. In the first half of 2025, the company recorded 1.4 million guests, 3.1 million overnight stays and an occupancy rate of 73 percent.
