Kai Yuan Holdings to Buy the Paris Marriott Hotel Champs-Elysees for $468M

Hong-Kong-based real estate investor Kai Yuan Holdings agreed to buy the Paris Marriott Hotel Champs-Elysees for $468 million.

Bloomberg reported that the company will borrow $280 million from shareholder Du Shuanghua, who owns a 5.54 percent stake in the property. This will mark the second hotel acquisition for Kai Yuan in the past six months, a deviation from its regular business in purchasing interests in steelmaking and real estate. The company closed out 2013 with the December purchase of a 90-room, 32-story hotel in Hong Kong's Sheung Wan district for $63-million, with the Paris buy representing a large leap in price.

According to the Straits Times, Kai Yuan has a market value of $160 million. Additional funding for the property will be required in addition to the bump from Shuanghua, which will come from internal resources and bank borrowings. The transaction is in the works to be completed by Sept. 5 at the latest.

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Reuters reported that the hotel is being purchased from French real estate company MCE PropCo. After the purchase, Kai Yuan aims to draw travelers from mainland China to the hotel to boost occupancy. 

According to the West Australian, Kai Yuan reported $97 million in revenue in 2013, yet posted a net loss of $13.5 million for the year. No changes in management will be taking place, as the Marriott hotel's management deal expires in 2030 and will be automatically be renewed for three successive periods of 10 fiscal years.

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