Three institutional investors sign agreement on €133-million European hotel portfolio (EU)

AXA Real Estate Investment Managers announces that, on behalf of a joint venture partnership between an investment vehicle of an AXA Group insurance company, Caisse des Dépôts and Sogecap (the 'JV'), an agreement has been signed to acquire a portfolio of six hotels from Foncière des Murs for €132.9 million, on a pure equity basis.

The transaction, which was sourced off-market and put together by AXA Real Estate, is expected to complete before the current year end.

Providing a total of 1,569 rooms, four of the hotels are located in Paris area, one is in Brussels with the other in Gent. All are strategically positioned in highly desirable locations with close proximity to developing business districts. In addition, as each hotel has recently undergone an extensive refurbishment program, the JV does not expect there will be a requirement to invest any material capex into the portfolio.

The hotels are operated by leading hotel group, Accor. With all leases linked to turnover, income from the portfolio is expected to grow in line with a strongly improving European hotel market, especially those catering for business travellers.

This transaction illustrates a growing trend for club deals, whereby investors can retain a stronger element of control and adopt a more targeted approach to investment, whilst benefiting from the asset management expertise of AXA Real Estate.

Following this acquisition, AXA Real Estate manages a portfolio of 99 hotels across Europe on behalf of clients, with a value close to €2 billion. It also expands AXA Real Estate's existing strong relationship with Accor, which operates 70 of the hotels within AXA Real Estate managed portfolio.

Commenting on the acquisition, Gael Le Lay, Head of Hotel Investment at AXA Real Estate said: "This commitment reflects AXA Real Estate's ability to source high quality transactions off-market and then package them to meet the specific requirements of our clients and investors, who in this case are focused on a long-term income driven approach.

"Acquired without debt, the rents generated from the turnover-linked leases are expected to grow alongside an improving hotel market, which will deliver strong income growth, without the need for material capital expenditure on the assets."

Antoine Jozan, Global Head of Investor Relations & Marketing of AXA Real Estate added: "This deal also shows AXA Real Estate's ability to marry its expertise in sourcing transactions with an in-depth understanding of specific client requirements which enables it to put together a group of like-minded investors in a joint venture which can act quickly to take advantage to these opportunities.

"It also demonstrates our expertise in managing portfolios across a number of specialist real estate sectors and our ability to work with leading operating partners, such as Accor."

Source: FD

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