Accor Announces sale of 158 hotelF1 properties for €272 million
Major real estate transaction in the Budget segment in France
In line with its ongoing asset-right strategy, Accor today announced a major real estate transaction in the Budget segment in France, with the sale of 158 hotelF1 properties, representing a total of 12,300 rooms.
Following the sale, Accor will continue to operate the 158 hotels under the hotelF1 brand, thereby retaining full control on pricing policy and product innovation process, which are essential to ensuring the brand’s sustainability. Since the end of 2008, about a hundred properties have been renovated as part of a vast refurbishment program, which includes the new Duo room concept (2 twin beds). The new offer is designed not only to consolidate the brand’s core base, but also to attract new customers.
This sale and variable leaseback transaction was carried out with a consortium of leading French institutional investors through a property investment trust (OPCI).
With the sale of the hotel units for €272 million, Accor signed a 12-year business lease, renewable six times at Accor’s option. The variable rents are based on an average 20% of revenue with no guaranteed minimum. Based on 2008 revenue, the variable rent would have been €21.3 million.
This transaction will enable Accor to reduce its adjusted net debt by approximately €187 million in 2009, of which €130 million will be added to the Group’s cash reserves. In addition, it will have a positive impact of roughly €5 million on profit before tax.
In a difficult economic environment, the transaction confirms the renewed interest of investors for hotel real estate, and particularly for the low-cost segment.
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AccorHotels is a world-leading travel & lifestyle group and digital innovator offering unique experiences in more than 4,000 hotels, resorts and residences, as well as in over 2,500 of the finest private homes around the globe. Benefiting from dual expertise as an investor and operator through its HotelServices and HotelInvest divisions, AccorHotels operates in 95 countries.
Its portfolio comprises internationally acclaimed luxury brands including Raffles, Fairmont, Sofitel Legend, SO Sofitel, Sofitel, onefinestay, MGallery by Sofitel, Pullman and Swissôtel; as well as the popular midscale and boutique brands of Novotel, Mercure, Mama Shelter and Adagio; the in-demand economy brands including ibis, ibis Styles, ibis budget and the regional brands Grand Mercure, The Sebel and hotelF1. With an unmatched collection of brands and a rich history spanning close to five decades, AccorHotels, along with its global team of more than 240,000 dedicated women and men, has a purposeful and heartfelt mission: to make every guest Feel Welcome. Guests enjoy access to one of the world's most rewarding hotel loyalty programs – Le Club AccorHotels.
AccorHotels is active in its local communities and committed to sustainable development and solidarity through PLANET 21, a comprehensive program that brings together employees, guests and partners to drive sustainable growth.
Accor SA is publicly listed with shares trading on the Euronext Paris exchange (ISIN code: FR0000120404) and the OTC marketplace (Code: ACRFY) in the United States.