Covivio announced it 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 €573 million (€248 million in Group share), including €86 million of capex.
This 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.
Totalling 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.
Besides, Covivio is pursuing a capex program of €86 million for the entire portfolio, that shows great potential for growth:
- 6 hotels are currently open and will undergo rebranding works (around €30 million)
- The hotels in Florence and Nice, under renovation (around €56 million of capex expected), will reopen respectively by end-2020 and in the second semester of 2021.
With this acquisition, Covivio bolsters its status as European leader in the hotel real estate market, with a portfolio of €6.8 billion (€2.6 billion Group share) located in the city-centre of major European touristic destinations.