GE joins BNP Paribas to grow hotel fund to EUR 1bn

GE Real Estate Europe has jumped aboard the Capital France Hotel fund, joining BNP Paribas Assurance as a founding limited partner. They intend to grow CFH's assets under management to EUR 1bn by 2010 by investing in hotels across the Euro zone, Scandinavia and Central and Eastern Europe.

The fund -which is managed by Algonquin Asset Management France - currently has EUR 275 mln of assets under management. The portfolio comprises twelve three-and-four-star hotels in French cities including Paris, Lyon, Nice and Nancy, operating under brands such as Radisson and Park Inn. The portfolio also includes three French hotels operated by Accor and Marriott that GE Real Estate has brought into the fund in exchange for CFH shares and cash.

The fund is open to acquiring both existing three-and-four-star hotels and to investing in development projects, said Remy Gancel, managing director and head of new business at GE Real Estate Europe. 'We do not allocate by country. Our approach is more opportunistic and we will look at every transaction on its own merit in terms of asset quality, potential profitability and fit with the rest of the portfolio,' he said .

CFH is focusing on the mid-market segment, as opposed to the budget or luxury market, because it is less volatile in a downturn, Gancel said.