ccor signs £587m property deal

Hotel giant Accor has signed a deal to sell 72 German properties and 19 in the Netherlands to Moor Park Real Estate for £587m. The Novotel, Mercure, Ibis and Etap hotels involved in the transaction represent a total of 12,000 rooms. Accor will continue to operate them under 12-year variable-rent leases, with rents based on an average 18% of annual revenues. Based on 2006 revenues, variable rent would have amounted to 49.5 million euros. The deal includes a £29m renovation program to be paid for by the new owner. Accor says its real estate management strategy is designed to “reduce earnings volatility and focus on its core business, hotels operations”. The Germany and Dutch announcement follows similar deals in the UK, France and Belgium. The transaction allows Accor to reduce its adjusted net debt by £416m, of which £146m will be added to the group's cash reserves, allowing it to expand further into both countries, a statement from Accor said.

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