Accor sells 158 hotels in France for EUR 272m

France's Accor has announced the sale and leaseback of 158 budget hotels representing a total of 12,300 rooms in France. The transaction price amounts to EUR 272 mln.

Europe's largest hotel company said the disposal was carried out with a consortium of French institutional investors through a property investment trust (OPCI).

Accor will continue to occupy and operate the hotels on 12-year rental contracts, with options for Accor to renew the leases six times. The variable rents are based on an average 20% of revenue with no guaranteed minimum. Based on 2008 revenue, the variable rent would have been EUR 21.3 mln, Accor said.

This transaction will reduce Accor's adjusted net debt by approximately EUR 187 mln in 2009, of which EUR 130 mln will be added to the group's cash reserves. In addition, it will have a positive impact of roughly EUR 5 mln on profit before tax.

'In a difficult economic environment, the transaction confirms the renewed interest of investors for hotel real estate, and particularly for the low-cost segment,' the company said.

The operation is the latest property disposal by Accor in Europe. At the end of 2007, the French hotel group sold 47 hotels in France and 10 in Switzerland to a consortium including Caisse des Depots et Consignations and AXA REIM for EUR 518 mln. In March 2007 it also disposed of 91 hotels in Germany and the Netherlands to Moor Park Real Estate for EUR 863m.