Invesco Real Estate has bought a portfolio of four mid-market InterCityHotels in Germany for a UK institutional investor as part of a pan-European long-lease strategy.

The €80m investment is, Invesco said, a long-term play for the client, with average leases of between 15 and 25 years.

The hotels, in Darmstadt, Mainz, Rostock and the Frankfurt Airport, come with 30-year hybrid leases to operator Steigenberger Hotels.

Long-lease strategies have been very popular recently with UK pension funds pursuing liability-driven investment (LDI) strategies, but most are focused on the UK property market.

Invesco told IP Real Estate last year that it had been devising a pan-European long-lease strategy.

The fund manager was unable to reveal the identify of the UK investor behind its new mandate.

According to Mark Socker, senior director of hotel fund management at Invesco, the German hotel market is a “relatively stable and attractive marketplace”.

Invesco said it had a number of mandates with an allocation to the hotel sector and was assessing other opportunities across Europe – with a focus on mid-market (3-4 star) hotels.

“This part of the sector offers the optimal risk/reward balance,” Socker said.

Global hotel consultancy HVS London estimates that total hotel transactions across Europe reached a value of €7.7bn last year – up 39% on 2012 and at their highest point since 2007.