Covivio signed a memorandum of understanding with AccorInvest to consolidate the ownership of jointly owned hotel operating and property companies.
Through its subsidiary Covivio Hotels, Covivio owns 54 hotels that are let to AccorInvest under long-term variable-rent leases based on revenues. AccorInvest owns and operates the operating companies of these hotels and has signed long-term management contracts with the Accor Group.
The memorandum concerns the acquisition by Covivio Hotels of 24 hotel operating companies – allowing the consolidation of these hotels, which will be owned and operated by Covivio Hotels – in exchange for the transfer to AccorInvest of title to 10 other hotel property companies, which will then be owned and operated by AccorInvest.
The property companies transferred to AccorInvest have an agreed value of €208m, while the operating companies acquired by Covivio Hotels are valued at €266m. Based on 2023 figures, the assets transferred to AccorInvest generate annual rental income of €11m, while the operating companies acquired by Covivio Hotels have an EBITDA of around €31m.
The transaction is expected to be finalized in the final quarter of 2024.
“Today marks another important step in our partnership with AccorInvest. The agreement will contribute to Covivio’s development in the hotel sector and gives us the opportunity to draw on the full range of our real estate and hotel expertise. By repositioning a large part of the portfolio, we intend to strengthen our ability to act directly on its performance, thereby leveraging significant growth potential,” said Tugdual Millet, CEO of Hotels, Covivio.
The memorandum outlines the acquisition by Covivio Hotels and its partners of 19 operating companies for the two joint ventures, allowing them to be consolidated as properties owned and operated by Covivio Hotels and its partners, in exchange for the transfer to AccorInvest of six other hotel property companies, which will then be owned by AccorInvest.
These consolidation transactions for Covivio Hotels and the joint ventures amount to a total of €393 million for the hotel property companies sold by Covivio Hotels and its partners, equivalent to the operating companies owned and operated by the companies whose shares will be acquired. Upon completion, Covivio Hotels and its partners will have consolidated ownership of 43 hotels and AccorInvest will have 16.
Image source - Pexels.
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