Aevis Victoria builds its hotel portfolio

Aevis Victoria has bought eight Swiss hotels, including the InterContinental in Davos, giving it a CHF 500 million ($505 million) portfolio via subsidiary Swiss Hotel Properties.

The deal came shortly after the purchase of Seiler & Partenaires Holding SA, with the transaction bringing together the real estate and operations of the hotels.

The latest deal saw hotels totaling 640 rooms bought from Credit Suisse Real Estate Fund Hospitality. Aevis Victoria also owns the four-strong Victoria-Jungfrau hotel collection.

The portfolio included The Mont Cervin and Petit Cervin buildings in Zermatt and the InterContinental building in Davos known as the Golden Egg.

The group said the purchase price was set “at a slight discount from the market value as at 31 December 2018,” reported at CHF 331 million. As part of this transaction, Aevis Victoria also acquired the operating company Weriwald, which managed the Davos InterContinental Hotel.

The deal with Credit Suisse included the Seiler Mont Cervin and Petit Cervin hotels in Zermatt, whose operations were acquired by Aevis Victoria in October as part of its acquisition of Seiler Hotels. These properties will be included in the Swiss Hotel Properties portfolio.

After integrating these assets on January 1 the total valuation of the portfolio will approach CHF 500 million with rental income of more than CHF 20 million. According to the company,  “Real estate management is essential for Aevis Victoria in order to allow for coherent investment planning, particularly in the hotel segment.”

Swiss Hotel Industry Robust

The Swiss Federal Statistical Office reported that, in 2018, the Swiss hotel industry recorded a total of 38.8 million overnight stays, its best result to date. This represented growth of 3.8 percent compared with the previous year.

Foreign guests generated 21.4 million overnight stays, an increase of 4.5 percent and its best performance in 10 years. Germany accounted for the strongest foreign demand with 3.9 million overnight stays (up 3.9 percent compared with 2017), followed by the United States with 2.3 million overnight stays (up 10.1 percent ) and the United Kingdom with 1.7 million (an increase of 2.3 percent).

Interest has been growing in Switzerland, which has seen new supply coming into the market. According to Horwath HTL’s “European Chains & Hotels Report 2019,” over a 10-year period to 2018 the number of hotels had dropped on average by 1 percent per annum.

In 2018, the country counted 114 hotels less than the previous year, equaling a record decrease of 2.6 percent. At the same time, Horwath HTL reported a 14.7 percent increase on the year in chain hotels, half of which was attributable to acquisitions and new hotel openings and the other from small domestic chains.

Michaela Wehrle, partner, Horwath HTL Switzerland, said, “The strong pipeline will continue to push smaller and outdated supply out of the market. In the Zürich region, 14 new chain hotels will add approximately 2,000 keys to the existing supply in all categories.”

Five new international brands, including Hard Rock Hotel and B&B entered Switzerland in 2018. The pipeline to 2021 includes another 13 new brands.