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HVS EMEA Hospitality Newsletter – Week Ending 04 May 2012

The latest hospitality news from Europe, the Middle East and Africa

Invesco Real Estate Buys Two Hotels In Berlin

Invesco Real Estate (IRE) has acquired two newly built hotels in Berlin, Germany, for around €60 million under a sale-and-lease-back deal with Azure Property Group, bringing the number of properties across Europe within IRE’s two dedicated hotel funds to 25 (more than 5,500 rooms). The 242-room Holiday Inn Alexanderplatz and the 153-room Hotel Indigo Alexanderplatz will be operated by Azure under franchise agreements with InterContinental Hotels Group. “We are delighted with the acquisition of these hotels, which are well located at Alexanderplatz, a strong and upcoming location in the heart of Berlin,” said Marc Socker, IRE’s director. “Our investment focus is always on the fundamentals; that is, high quality, mid-market hotels, good investment lot sizes, strategic location, brand strength, high operator expertise and the long lease terms. This acquisition ticks all of these boxes in addition to providing diversification to the portfolio in terms of geographic location, as Berlin is one of Germany’s most dynamic hotel markets and this is our first investment here,” he added. HVS London was pleased to have advised Azure on this transaction.

A Park Inn For Glasgow And A Radisson Blu For Riyadh

Rezidor Hotel Group has announced its second hotel for the Scottish city of Glasgow: the Park Inn by Radisson Glasgow City Centre, which is to be developed in a former office building. The 91-room hotel, due to open in the first quarter of 2013, will be Rezidor’s 31st Park Inn property in the UK. This week, Rezidor also signed an agreement with Mafaz International Development Company (MIDC) for a new hotel in Saudi Arabia. The Radisson Blu Hotel, Riyadh North Ring Road is scheduled to open in Riyadh in 2015 as part of the North Ring mixed-use project, owned and developed by MIDC. This is the second hotel Rezidor has signed in Saudi Arabia so far this year.

Meliá Number Five For Düsseldorf

Meliá Hotels International has signed a lease agreement for its second Innside by Meliá property and its fifth hotel overall in Düsseldorf, western Germany. The new 134-room Innside hotel is to be developed in the city’s iconic, 17-storey multicoloured Colorium building, which also houses office and retail space. The hotel is expected to open in mid 2013.

Viceroy To Make Its Debut In Europe

Los Angeles-based Viceroy Hotel Group is to make its debut in Europe with a hotel in the city of Istanbul, Turkey. The group has been chosen to operate a five-star urban resort in the city’s Bebeköy area. The 58-unit Viceroy Istanbul will comprise ten buildings across 16 acres and is expected to open in late 2013. Viceroy already has one other hotel under development in Turkey, the Viceroy Bodrum, which is scheduled to open in 2014.

Triple News For Starwood

Starwood Hotels & Resorts has been busy this week – first, its St. Regis brand made its debut in Qatar with the opening of the St. Regis Doha. The 336-room hotel, owned by Resorts Development Company and developed by Alfardan Group, is the second of three St. Regis openings planned for the Middle East within a year; the St. Regis Saadiyat Island Resort, Abu Dhabi opened first last December and the St. Regis Abu Dhabi is due to open this autumn. Next, Starwood headed over to Iraq to sign an agreement with BCD Co. to manage a new-build Sheraton hotel in Erbil. Due to open in 2015 with 221 guest rooms and 39 suites, the Sheraton Erbil Hotel will be the group’s first hotel in the country for 20 years. Roeland Vos, Starwood Hotels & Resort’s president for Europe, Africa and the Middle East, said, “We are delighted to partner with BCD as we re-introduce Starwood to Iraq with Sheraton, our most iconic brand. The opening of the new Sheraton Erbil Hotel further underlines Starwood’s commitment to growth and expansion in the region.” Next stop was the emirate of Sharjah, UAE, where Starwood signed an agreement with businessman Amer Eisa Mousa Al Amri for the Aloft Sharjah. Marking the entry of the Aloft brand in the emirate, the 286-room hotel is scheduled to open at the beginning of 2015.

Millennium On Its Way To Mecca

Millennium & Copthorne has signed a management agreement with Jeddah-based Nobola International Real Estate Investment Company for a hotel in Mecca, Saudi Arabia. The 735-room Copthorne by Millennium Makkah, which is currently under development, is due to open in 2014.

Marriott In Kuwait And Saudi Arabia

Marriott International plans to open its first Residence Inn property in Kuwait. The group has signed an agreement with Family United General for the 143-unit Residence Inn by Marriott Kuwait City, which is expected to open in the country’s capital in 2015. This will be Marriott’s third hotel in the country overall. Marriott also announced the debut of its Marriott Executive Apartments brand in Saudi Arabia – the 117-room Marriott Executive Apartments Riyadh Makarim will open in May 2012 on Al-Mather Street in Riyadh.

Hilton’s Debut In Doha

Hilton Worldwide made its debut in Qatar this week with the opening of the Hilton Doha. On the headland of Doha’s Corniche, the 309-room hotel overlooks the Arabian Gulf. “We have worked hard to create a world-class hotel to best reflect Qatar’s growing ambitions to be a major global player. It’s no secret that Doha is set to become an important sporting and cultural Middle East hub and we’re looking forward to bringing the Hilton brand’s trademark hospitality and services to such an exciting and motivated city community,” said Rudi Jagersbacher, Hilton’s president for the Middle East and Africa.

InterContinental Heads For The Hills In Muscat

InterContinental Hotels Group (IHG) has signed a 20-year management agreement with Muscat Golf Course Project LLC for the InterContinental Muscat Hills Golf Resort in Oman. The 250-room hotel will be part of the Muscat Hills Golf and Country Club, a mixed-use development that will also include residential villas and apartments and an 18-hole championship golf course. IHG will also manage the golf clubhouse, adjacent to the hotel. Both the hotel and the clubhouse are scheduled to open in 2015.

A Coral Boutique For Baghdad

Dubai-based Coral Hotels & Resorts has announced its imminent entry into Iraq’s hotel market. The group has signed a management agreement with United Iraqi Trading Company for the Coral Boutique Hotel Baghdad. In the advanced stages of development, the 80-room hotel is due to open in the next few weeks.

More Fairmont For The UAE

Fairmont Hotels & Resorts is planning a new property for the UAE. The Fairmont Ajman is due to open in the country’s smallest emirate at the beginning of 2013 and will mark the group’s entry into the Ajman market. Fairmont has two hotels in operation in the UAE, in Abu Dhabi and Dubai, and another three in development (including the Fairmont Ajman).

Marriott International’s First-Quarter Results

Marriott International recorded a first-quarter net income for 2012 of US$104 million, an 18% increase on the same period in 2011. The group’s revenue reached more than US$2.5 billion in the first three months of the year. Base management fees rose by 3% to US$124 million and franchise fees increased by 8% to US$126 million. EBITDA totalled US$215 million for the first quarter, a 9% increase on 2011. Marriott opened more than 3,200 rooms during the first quarter of the year and the group’s worldwide development pipeline increased to approximately 115,000 rooms, including more than 51,000 rooms outside North America. “Our balance sheet continues to be in great shape. With strong cash flow, we are investing in our business while returning significant cash to our shareholders through dividends and share repurchases,” said Arne Sorenson, Marriott’s chief executive officer and president.

A Pick-Up In Profit For Millennium & Copthorne

Millennium & Copthorne Hotels achieved a profit before tax of £25.9 million in the first quarter of 2012, an increase of 31.5% on the same period in 2011. Like-for-like total revenue rose by 5.4% to £173.5 million and like-for-like group RevPAR grew by 5.6%. Commenting on the figures for the first three months of the year, Kwek Leng Beng, the group’s chairman, said, “With a strong balance sheet and gearing approaching zero, we are in a good position, both to continue investing in our property portfolio to improve returns and to grow the portfolio when we identify attractive strategic investment opportunities. We have been actively seeking such opportunities since the second half of last year, but vendors’ price expectations in key gateway cities are still too high.”

Gladen’s Tidings

The news from Spain by Esther Gladen, Business & Market Intelligence Analyst, HVS Madrid. The Vincci Bit in Barcelona has opened its doors: the four-star property, next to Avenida Diagonal, has 177 rooms and is operating under a lease contract. The owner of the building, Grupo Rosales, invested €45 million in a refurbishment of the property. Vincci Hoteles has two more hotels in the city: the Vincci Arena and the Vincci Marítimo. Luabay Marivent in Majorca now open: the former Hotel Santana in Playa Major is now part of the Luabay portfolio. It has a four-star rating and 195 rooms. Luabay plans to open two more hotels this month under lease contracts.

Absolute Share Price Performance Over the Past Week – 26 April-3 May 2012



InterContinental Hotels Group (IHG) – IHG strengthened above its Moving Average Price.

Meliá Hotels International – Meliá weakened below its Moving Average Price.

NH Hoteles – NH dipped 0.8% on high volume falling for a fourth consecutive day, a four-day fall of 4.5%.


For the latest in the hospitality industry, please visit: http://www.hvs.com. You are also welcome to contact the following personnel.

Russell Kett, Chairman – HVS London (@russellkett) rkett@hvs.com
Charles Human, Managing Director – HVS Hodges Ward Elliott chuman@hvshwe.com
Tim Smith, Director – HVS London tsmith@hvs.com
Chris Martin, Director – HVS Hodges Ward Elliott cmartin@hvshwe.com
Demetris Spanos, Managing Director – HVS Athens dspanos@hvs.com
Hala Matar Choufany, Managing Director – HVS Dubai hchoufany@hvs.com
Christopher Mumford, President, EMEA – HVS Executive Search (@ChrisMumford) cmumford@hvs.com
Philip Bacon, Managing Director – HVS Madrid and Managing Director, EMEA & Asia – HVS Shared Ownership Services pbacon@hvs.com
Saurabh Chawla, Director – HVS Asset Management and Strategic Advisory schawla@hvs.com
Louise Fury, Senior Editor and EMEA Hospitality Newsletter Author – HVS London lfury@hvs.com