Qatar-based hotel owner, operator and developer Katara Hospitality has teamed with AccorHotels to kickstart an investment fund, with more than $1 billion geared toward the expansion of Sub-Saharan Africa's hotel market.
The fund will gain up to $500 million in equity, of which Katara Hospitality and AccorHotels will contribute up to $350 million and $150 million, respectively, over the next five to seven years. The fund will secure additional financing through leverage and co-investments.
The partners will use the funds to develop greenfield projects, brownfield projects and conversions of existing hotels through acquisitions in the region. Approximately 40 hotels with close to 9,000 guestrooms will operate under several Accor brands ranging from economy to luxury, including residences.
Katara Hospitality and AccorHotels aim to support job creation, training, transfer of skills, the local supply chain and communities through this initiative. The companies also plan to operate the fund in compliance with UN sustainable-development goals.
The new hotels will expand Katara Hospitality's reach across Africa, where the company currently owns two properties: Renaissance Sharm El Sheikh Golden View Beach Resort in Egypt and Tazi Palace Hotel, Tangier in Morocco. The Renaissance hotel was Katara Hospitality's first acquisition outside of Qatar. Its resort is still under development in Tangier, where Katara Hospitality is converting a former palace into a hotel with guestrooms and three villas. The new resort is slated to open in 2020.
“It is evident in the recent times that Sub-Saharan Africa’s hospitality industry has made great strides, and follows the latest positive developments between the State of Qatar and Sub-Saharan Africa to enhance bilateral relations in different industries. We view this fund as an excellent vehicle to take advantage of this compelling markets by teaming up with AccorHotels, [which provides] international hotel brands and operations with strong capabilities,” Sheikh Nawaf bin Jassim bin Jabor Al Thani, chairman of Katara Hospitality, said in a statement.
The new properties also will boost AccorHotels' portfolio in the continent where it has 124 hotels with 22,401 guestrooms. These operate under the Fairmont, Sofitel, Rixos, Novotel, Mercure, Ibis, Ibis Styles, Ibis Budget, MGallery and Pullman brands.
“I am thrilled to announce this key alliance with our outstanding business partner Katara Hospitality. Having been present for over 40 years in Africa, we also know that there are increasing and sizeable needs for quality hospitality. Through this fund, we will match the expertise of Katara Hospitality together with AccorHotels’ world-leading brand portfolio to accelerate our dynamic growth trajectory in the Sub-Saharan region. Above all, by this initiative we demonstrate our shared intention to support sustainable development over the long-term on this continent," Sébastien Bazin, chairman and CEO of AccorHotels, said in a statement.