Covivio Hotels has signed a memorandum of understanding with AccorInvest to consolidate the ownership of jointly owned hotel operating and property companies.
The memorandum concerns the acquisition by Covivio Hotels of 24 hotel operating companies – allowing the consolidation of these hotels which will be owned and operated by Covivio Hotels – in exchange for the transfer to AccorInvest of title to 10 other hotels property companies, which will then be owned and operated by AccorInvest.
The value of the property companies transferred to AccorInvest is €208 million, while the value of the operating companies acquired by Covivio Hotels is €266 million. Based on 2023 figures, the assets transferred to AccorInvest represent annual rental income of €11 million, while the operating companies acquired by Covivio Hotels generate ebitda of around €31 million.
Covivio says the deal, which is expected to complete in the fourth quarter of 2024, allows it to acquire operating companies in major tourist areas with considerable potential for value creation through repositioning and management optimisation. Some of these hotels will continue to operate under Accor brands under management or franchise agreements while others will be rebranded.
Covivio Hotels is also the indirect owner and asset manager of another 60 hotels leased to AccorInvest and held through two joint ventures created in 2010 and 2014 respectively: one 80 per cent owned by Crédit Agricole Assurances and 20 per cent by Covivio Hotels, and the other owned by Caisse des Dépôts et Consignations, Société Générale Assurances and Covivio Hotels.
The memorandum provides for the acquisition by Covivio and its partners of 19 operating companies for the two joint ventures in exchange for the transfer to AccorInvest of six other hotel property companies, which will then be owned by AccorInvest.
These consolidation transactions for Covivio Hotels and the joint ventures represent a total of €393 million. Upon completion, Covivio and its partners will have consolidated ownership of 43 hotels and AccorInvest, 16.
What they said
Tugdual Millet, CEO Hotels at Covivio said: “ This marks another important step in our partnership with AccorInvest. The agreement will contribute to Covivio’s development in the hotel sector and gives us the opportunity to draw on the full range of our real estate and hotel expertise. By repositioning a large part of the portfolio, we intend to strengthen our ability to act directly on its performance, thereby leveraging significant growth potential.