AccorHotels is set to sell a majority of real estate arm AccorInvest for €4.4 billion.
The French hospitality giant will initially sell 55% of AccorInvest to a group of international investors.
AccorInvest hotels will be operated by AccorHotels under “very long-term” contracts, namely 50 years, including a 15-year renewal option, for luxury and upscale hotels and 30 years on average, including a ten-year renewal option, for hotels in the midscale and economy segments.
Management contract terms that have been negotiated between the parties are in line with market practices, according to the company
The real estate business has almost 30,000 staff and operations in 27 countries with a portfolio of 891 hotels, the majority in Europe. Of the total, 324 are owned and 567 are operated under fixed or variable-rent leases.
AccorHotels chairman and CEO Sébastien Bazin said: “These agreements represent a key milestone for the group.
“Following the separation of AccorInvest into a stand-alone legal entity last summer, we are now gathering a round-table of leading investors, on the basis of a valuation that fully reflects its global leadership and the quality of its assets, while building a long-term relationship between AccorHotels and AccorInvest.
“These elements were essential to make this operation a success for all stakeholders: teams, partners, as well as present and future shareholders of both entities.
“The entry of new shareholders and the deconsolidation of AccorInvest will provide AccorHotels with substantial leeway to enhance our dynamic growth and innovation strategy and create value for shareholders.
“For its part, AccorInvest will take advantage of its new powerful shareholders’ support, as well as a strengthened financial structure to execute its roadmap and continue to reinforce its portfolio of assets.”