Covivio to Buy Luxury Hotels Portfolio From Varde and Rebrand as Anantara

Main Photo: The Boscolo Nice

Date: November 2019, updated January 2020

Location: Italy and France

Name: Boscolo Hotels

No. of Keys: 1,300

Seller: Varde, who bought the hotels, from Italian group Boscolo in 2017, for €450m. It includes famous properties such as the Grand Hotel dei Dogi in Venice and Palazzo Naiadi in Rome.

Värde Partners is a leading global alternative investment adviser with roots in credit and distressed. Värde means value in Swedish.

Investments span corporate and sovereign credit, restructurings, real estate, mortgages, private equity, and direct lending. The firm has invested more than US$60 billion since its founding in 1993, and employs more than 300 professionals across 13 offices worldwide. Värde currently manages over $14 billion in assets on behalf of its investors around the world.

The company started in 1993 in Minnesota by three investment professionals: George Hicks, Marcia Page and Greg McMillan.

Back in December  2018, Blackstone Real Estate Debt Strategies provided a €337m loan to Värde Partners.

The US$12bn (€10.53bn) alternative investment firm re-branded the hotels to The Dedica Anthology throughout Italy, France, Hungary and the Czech Republic.

The Dedica Anthology said the amount received from Blackstone will be used to refinance legacy loans and provide additional capital to invest in its estate.

Stephen Alden, the CEO of The Dedica Anthology, said: “Our focus is now fully on building The Dedica Anthology brand, carrying out strategic renovation and restoration work on our distinctive properties, strengthening our team and growing our business.”

Stephen has a massive history in class hotels, starting with Starwood in Italy, moving on to the classic Maybourne Group in London, with a trip at Set Hotels (London’s Cafe Royal, Paris’s Lutetia and Amsterdam’s The Conservatorium.

Alessandro Grassivaro, the CFO of The Dedica Anthology, said: “Dedica now has a firm financial foundation from which to invest in our real estate and build a successful brand for the future, both as owner as well as operator.”

Francisco Milone, a partner and head of European real estate at Värde Partners, said: “Since completing the purchase of Gruppo Boscolo in April 2017 we have put in place a new management team and rebranded the hotels to The Dedica Anthology throughout Italy, France, Hungary and the Czech Republic.

“Now with that strong management in place, a restructured balance sheet and a supportive and expert lender in Blackstone, the company is well-positioned for growth.”

Michael Zerda, a managing director and head of Europe for Blackstone Real Estate Debt Strategies, commented: “We are thrilled to have Värde as a valued new client and we’re excited to be a part of their repositioning of this iconic portfolio of hotels.

Buyer: The French real estate group Covivio Hotels is set to buy a portfolio of European luxury hotels from private equity group Varde, two sources close to the matter said on Wednesday.

The deal, which should be sealed by the year end, was worth about 500 million to 600 million euros, one of the sources said.

It follows a wave of deals in the European luxury hotels sector, including the purchase of Germany’s Steigenberger hotels by China’s Huazhu Group.

Hotel investments are set for a record high this year in Italy, industry officials say. In the first nine months of 2019, investments in Italian hotels tripled to 2.56 billion euros compared with a year earlier, real estate services group CBRE said.

The head of Covivio’s Italian arm Alexei Dal Pastro told a conference in Milan on Tuesday that Covivio was interested in investing in Italian hotels, without giving more details.

Update January 2020: After the acquisition, Covivio, the real estate investor and NH Hotel Group have reached an agreement for handing operation of this luxury portfolio to the latter. The hotel group has agreed with Covivio a long-term sustainable lease contract under which it will pay variable rent with minimum guaranteed, including a shortfall cap mechanism. The agreement has an initial duration of 15 years, extendable at NH Hotel Group’s option to a period of not less than 15 years.

The closing of the transaction is expected to be fully complete by the end of the first half of 2020. The handover of the hotels will take place at the same time of the closing, except for the hotels in Florence and Nice -currently under a full refurbishment-, expected by June 2020 and January 2021 respectively.

Ramón Aragonés, CEO of NH Hotel Group, commented on the deal, “following our integration with Minor Hotels, this transaction represents an extremely important milestone in our shared ambition to continue to expand the luxury brand Anantara Hotels, Resorts & Spas in Europe, while marking significant progress on our strategy of creating added value for NH Collection´s customer base via new hotels and destinations.

This agreement reinforces the collaboration between Covivio and NH Hotel Group, which dates back to 2014 and has since unlocked advantageous deals for both parties in the Netherlands and Germany”.

The hotels are flagship establishments and they will gradually be re-branded under the Anantara Hotels & Resorts and NH Collection brands. Covivio is now pursuing a works program for the entire portfolio, that shows great potential for growth in the medium term.

Price: Between €550m and 600m

Price per Key: at say €550m…€423,077

THPT Comment: Varde obviously set out to do something stunning in European hotels quite recently, so surprising they have sold the hotels so quickly to Covivio, but maybe this is just a refinance? Mind you a tidy profit on two years.

First Seen: Reuters

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