AccorInvest plans to sell €2bn of hotel assets to cut debt — reports

AccorInvest plans to sell €2 billion of hotel assets in Europe and Latin America in order to cut debt, according to a report by Bloomberg.

The group, which has more than 750 hotels operated by Accor SA, is looking to raise about €2 billion from hotel sales to repay creditors and will also talk to lenders to amend the terms and extend the maturity of €4 billion of debt coming due in 2025.

AccorInvest is working with Societe Generale SA on the sale of the Paris hotels. It has also hired other brokers and banks to advise on selling five Ibis hotels in the UK, as well as portfolios of assets in Germany and Latin America, a hotel in the Netherlands and a Sofitel in the central and eastern Europe region. The company is also working with Rothschild & Co. ahead of the talks with creditors.

Societe Generale and Rothschild had provided no comment at time of publishing.

Why it matters

If successful, this sizable divestment hotel assets will no doubt, have far-reaching impacts on the sector, including but not limited to asset values and annual transaction amounts in the concerned markets.  While the divestments present opportunities for investors to acquire established hotel assets in prime locations, AccorInvest’s decision to move on such a sizable sale could signify serious financial pressures.

What they said

In a statement, AccorInvest said: "The information published by Bloomberg on 12 October 2023 refers to the strategy AccorInvest has been deploying since 2020 to refocus its hotel portfolio on the economy and mid-scale segments in Europe, while reducing its debt.

"As part of AccorInvest’s strategic plan has already been implemented, the figures indicated by Bloomberg are inaccurate : in 2021 and 2022, AccorInvest already completed disposals representing €500 million. 

"Reinforced by the company’s very good 2022 operating results, AccorInvest decided early 2023 to accelerate its asset disposal project, representing €1.7 billion by 2025. The company’s excellent operating results for the first half of 2023 confirm its ambition to do so.

"As planned, these disposals will also contribute directly to the reduction of the company’s debt, and will facilitate the its refinancing. In parallel to the deployment of its asset disposal project, AccorInvest is having constructive discussions with its lenders regarding the negotiation of an "Amend & Extend" agreement."