Accor Announces the Sale of 5 Hotels in 4 European Countries for EUR154 Million
As part of the ongoingdeployment of its 'asset right' strategy, Accor has announced aninternational real estate transaction involving the sale of five hotels(representing more than 1,100 rooms) in four European countries for EUR154million.
The transaction has been carried out with Invesco Real Estate, a majorreal estate manager in the United States, Europe and Asia, with assets undermanagement of more than EUR18 billion, of which EUR650 million in Europeanand US hotel properties. The transaction involves five hotels:
- The Novotel Muenchen City in Munich (307 rooms)
- The Novotel Roma la Rustica (149 rooms) and the Mercure Corso Trieste in Rome (97 rooms)
- The Mercure Zabatova in Bratislava, currently under construction (175 rooms)
- The Pullman Paris La Defense (384 rooms)
The Novotel and Mercure hotels have been sold under a sale and variableleaseback agreement for EUR74 million, of which EUR17 million for the MercureZabatova. They will continue to be operated by Accor under a 15-yearvariable-rent lease (corresponding to 22% of average annual revenue) that canbe renewed at Accor's initiative. Insurance, property taxes and structuralmaintenance costs will now be at the owner's expense.
The Pullman Paris La Defense has been sold for EUR80 million, including aEUR10-million renovation program at the owner's expense. The hotel willcontinue to be operated by Accor under a 12-year management contract that canbe renewed six times.
Financially, the transaction enables Accor to reduce adjusted net debt byEUR93 million in 2010 and will have a neutral impact on operating profitbefore tax and non-recurring items.
The transaction confirms Accor's ability to continue actively pursuingits "asset right" strategy, even in a difficult economic environment, withthe goal of reducing earnings volatility and sharpening the focus on its corecompetency - hotel management.
Accor, a major global group and the European leader in hotels, as well asthe global leader in services to corporate clients and public institutions,operates in nearly 100 countries with 150,000 employees.
