Accor Hotels snaps up Ibis chain for $200 million

The hotel sector will be transformed with the construction of new sites and increased demand.

This follows AccorHotels striking a deal with a subsidiary of the Abu Dhabi Investment Authority (ADIA) to restructure a portfolio of 31 hotels in Australia.

It’s a deal focusing on a 4097-room portfolio bought by the wholly owned ADIA subsidiary in 2013 and operated by AccorHotels.

The acquisition comes at a particularly busy time for Australia’s hotel industry.

Gus Moors, head of hotels Australia at Colliers International told the Sydney Morning Herald there had been over $2.4 billion in hotel sales across Australia in 2016.

The deal will see AccorHotels converting 15 triple-net leases into 50-year management agreements and extending the management term of one hotel to 50 years. It will involve a total of 16 hotels.

Operating under the HotelInvest group,  AccorHotels, will also acquire the real estate of the remaining 15 ibis and ibis Budget-branded properties for $200 million.

"This deal is in line with our stated strategy to optimise cash-flow generation, reduce earnings volatility and restructure lease contracts into owned and managed hotels," HotelInvest chief operating officer John Ozinga told the Sydney Morning Herald.

"The acquisition of the economy hotels in key locations is a signal of our continued focus on supporting the group's growth strategy by holding a selective portfolio of profitable hotel property assets."

The portfolio is huge, spread across city and regional locations in NSW, Victoria, the Northern Territory, Western Australia and Queensland. The hotels are located in Sydney's Darling Harbour, Sydney Olympic Park and Canberra.

The portfolio also incorporates the Pullman, Novotel, Mercure, ibis, ibis Styles and ibis Budget brands.

All this is in addition to the Accor-operated new Sofitel in Darling Harbour, which is due to open in mid to late 2017.

It also coincides with the opening of the new International Convention Centre in Sydney.

by Leon Gettler, Janaury 30^th 2017