French hotel group Accor has divested five hotel properties with over 1,100 rooms in four European countries to Invesco Real Estate for a total of EUR 154 mln. In a statement on Friday, the hotel group said the move is 'part of the ongoing deployment of its asset-right strategy, with the goal of reducing earnings volatility and sharpening the focus on its core competency, hotel management.'

French hotel group Accor has divested five hotel properties with over 1,100 rooms in four European countries to Invesco Real Estate for a total of EUR 154 mln. In a statement on Friday, the hotel group said the move is 'part of the ongoing deployment of its asset-right strategy, with the goal of reducing earnings volatility and sharpening the focus on its core competency, hotel management.'

The transaction involves the Novotel Muenchen City in Munich (307 rooms); the Novotel Roma la Rustica (149 rooms) and the Mercure Corso Trieste in Rome (97 rooms); the Mercure Zabatova in Bratislava, currently under construction (175 rooms) and the Pullman Paris La Défense (384 rooms).

The Novotel and Mercure hotels have been sold under a sale and variable leaseback agreement for EUR 74 mln, of which EUR 17 mln for the Mercure Zabatova. They will continue to be operated by Accor under a 15-year variable-rent lease (corresponding to 22% of average annual revenue) that can be renewed at Accor's initiative. Insurance, property taxes and structural maintenance costs will now be at the owner's expense.

The Pullman Paris La Défense has been sold for EUR 80 mln, including a EUR 10-mln renovation programme at Invesco's expense. The hotel will continue to be operated by Accor under a 12-year management contract that can be renewed six times.

Financially, the transaction enables Accor to reduce its adjusted net debt by EUR 93 mln in 2010 and will have a neutral impact on operating profit before tax and non-recurring items.