Foncière des Régions is merging its two hotel vehicles to create a portfolio of 55,000 rooms under management and €4.3 billion of assets.
Groupe du Louvre has signed an agreement for a “significant majority” in Hôtels & Preference, as France’s Macron bounce spills over into the country’s operators and investors, steering it out of the doldrums.
FDM Management and Foncière des Murs will combine to create a new vehicle with 39 percent of its portfolio in France, 34 percent in Germany and the balance in Spain, Belgium, Netherlands and Portugal. Income will be split 45 percent in fixed rents, 24 percent in variable rents and 31 percent in operating properties.
The group said that the move, which should be finalized in early 2018, would reinforce its position as a hotel investment leader in Europe.
At Groupe de Louvre, which was acquired by Jin Jiang International in 2015, but is headquartered in Paris, an undisclosed amount has been on a majority stake in Hôtels & Préférence which includes 140 affiliates, including 122 in France. More than 80 percent of the portfolio is in four-star plus and five-star categories.
Pierre-Frédéric Roulot, CEO, Groupe du Louvre & Jin Jiang International, Europe, said that Hôtels & Préférence “boosts our portfolio with ‘palace,’ luxury and resort properties, as well as boutique hotels, business hotels and many ‘demeures de charme,’ or hotels with character. This is the natural extension of our positioning and strategy to upscale our group. We share the same demanding standards, the same hospitality values and embrace the multiple potential synergies to pursue growth in France and internationally.”
To retain the value preposition, Hôtels & Préférence will remain an independent chain and no rebranding is planned by Groupe du Louvre.
The country has been buoyed by the election of Emmanuel Macron, who has ushered in tax cuts and labor reform, as well as the successful bid for Paris to host the Olympics Games in 2024. In September, economic activity in France rose at the sharpest rate in over six years—since May 2011—with the IHS Markit Eurozone PMI Composite Output Index reporting growth of output and new orders relatively evenly distributed across the manufacturing and service sectors.
“Clearly, activity is picking up and I think we have turned a corner finally," Carine Bonnejean, head of consultancy for hotels at Christie & Co., told HOTEL MANAGEMENT. "I would agree that we are going to see a positive resurgence of France on many fronts. From the market trading performance, to increasing interest from global investors in the French market as well as French investors gearing up for expansion.”
“French real estate asset managers, such as Amundi, AEW Ciloger, AXA and Groupe Paref, have seen their annual cash collection increase dramatically over the past two years," Romain Gowhari, head of hotel capital markets, France, Benelux & Italy, Christie & Co, said. "This generated an excess of liquidity and a scarcity of good office/retail products that push them to diversify their allocation both in terms of asset classes and geography. This benefits directly hotel investments both in France and abroad—in Germany and Italy—some of them even started doing management agreements when they historically confined themselves to lease agreements.”
To quote president Macron, en marche!
Katherine Doggrell is an editor at Hotel Analyst, the U.K.-based news analysis service for hotel investors.