Eurazeo launches €504m hotel investment JV with AccorHotels

French investment firm Eurazeo Patrimoine has entered into exclusive negotiations with AccorHotels to acquire a portfolio of 85 European hotels as part of plans to create a new hotel platform.

Under the agreement, which values the portfolio at €504 mln, Eurazeo and AccorHotels will hold stakes of 70% and 30% respectively in the new business. There is also the possibility of a third institutional investor joining the venture in the short term, Eurazeo said. Eurazeo will fork out €150 mln for its stake.

The transaction covers 85 budget and mid-range hotels representing 9,125 rooms, most of which are located in France (in Greater Paris and the regions) and major European cities (eight countries).

Eurazeo Patrimoine will take over all the businesses and some of the premises from AccorHotels, the remaining premises being directly acquired from various real estate investors in place of AccorHotels.

The new hotel investment company will have the necessary resources to renovate the portfolio of hotels, which are all AccorHotels franchises (Ibis, Ibis Budget, Ibis Styles, Mercure, Novotel, and Pullman).

Headed by a team of professionals, partly staffed by AccorHotels employees, the platform will also purchase other hotels or hotel portfolios with value creation potential.

'A cross between real estate business lines and Eurazeo’s transformation know-how, our second investment in just a few months symbolizes the strategy of Eurazeo Patrimoine,' said Renaud Haberkorn, chief investment officer of Eurazeo Patrimoine. 'Over and above the investment in a hotel portfolio with significant added value potential, our ambition is to create a major hotel investment player in the European market.'

With a diversified portfolio of over €5 bn in assets, Eurazeo is a major listed investment company which covers most private equity segments through its four business divisions – Eurazeo Capital, Eurazeo Croissance, Eurazeo PME and Eurazeo Patrimoine.