"Asset-medium" AccorHotels to sell 85-hotel portfolio in Europe

AccorHotels is in negotiations to sell an 85-hotel portfolio in Europe to a new franchisee hotel operator. The new company will be up and running by the end of first-half 2016 and will become the largest franchisee for HotelServices, the operating and franchising arm of AccorHotels.

In a statement, the company said that the hotels, which are in the economy and midscale segments, have an asset value of €504 million. The newly created entity will be owned by Eurazeo (70 percent) and AccorHotels (30 percent)—and AccorHotels' statement indicated that a third party may soon join in. The entity's management team will be partially made up of AccorHotels employees who are joining the new franchisee. All of the hotels included in the transaction will maintain their AccorHotels brand via long-term franchise agreements and will undergo renovations (estimated at a cost of €100 million) within 36 months after the transaction has been finalized.

The portfolio includes 28 hotels assets and the business interest of all 85 hotels, sold by AccorHotels for €146 million; and 57 hotel assets covered by the purchase agreements containing a substitution clause for the buyer signed with Foncière des Régions, Axa IM – Real Assets and Invesco, for a total amount of €358 million.

By brand, the portfolio comprises one Pullman hotel, 19 Novotel properties, 13 Mercure hotels, 35 ibis hotels, three ibis Styles and 14 ibis budget hotels. The majority of these hotels are located in France (61 hotels, primarily in regional cities and on the outskirts of urban agglomerations) and Spain (nine hotels), while the remainder are spread across Italy, Portugal, Germany, Austria, Belgium and the Netherlands.