PARIS—Covivio, through its subsidiary Covivio Hotels held at 43.3%, has completed the acquisition of the portfolio of eight hotels located in Rome, Florence, Venice (x2), as well as in Nice, Prague and Budapest (x2) for $675 million ($292 million group share), €573 million (€248 million in group share), including $101 million (€86 million) of CapEx. The portfolio of high-end establishments in prime locations includes several emblematic hotels such as the Palazzo Naiadi in Rome, the Carlo IV in Prague, the Plaza in Nice and the NY Palace in Budapest.
A Strengthened Partnership with NH Hotel Group
Totaling 1,115 rooms, the hotels will be operated by NH Hotel Group through long-term triple net lease contracts with minimum guaranteed variable rent, generating a minimum yield of 4.7%. The agreement has an initial duration of 15 years, extendible at NH Hotel Group’s option to 30 years. Covivio is pursuing a CapEx program of $101 million (€86 million) for the entire portfolio that shows potential for growth:
- Six hotels are currently open and will undergo rebranding works around $35 million (€30 million)
- The hotels in Florence and Nice, under renovation with around $66 million of CapEx expected (€56 million), will reopen respectively by the end of 2020 and in the second semester of 2021.
Thanks to their strong long-term partnership, Covivio and NH Hotel Group have completed this acquisition, which was revealed last January and postponed to September due to the health environment. Initiated in 2014, the collaboration with NH Hotel Group began with the acquisition of a hotel in the center of Amsterdam and then continued between 2016 and 2018 with the purchase of ten hotels in Germany, the Netherlands and Spain.
A Portfolio Strategic for Hotel Operators
With this acquisition, Covivio has a portfolio of $8 billion ($3 billion group share), €6.8 billion (€2.6 billion group share), located in the city-center of European tourist destinations. Despite an unprecedented crisis, Covivio, through this investment, highlights its confidence in the long-term fundamentals of the hotel industry and its capacity of recovery, according to the company. Covivio is currently partnered with nearly 20 hotel operators, representing about 30 brand names spread out over 12 European countries.