Dare and do: these two words might most appropriately qualify the real estate company’s strategy. One of the keys to its success is incontestably its ability to extract maximum value from well-targeted assets. Gaël le Lay, Deputy CEO, Covivio Hotels will share the vision of one of the biggest hotel investors in Europe during the Paris Asset Forum.
The investment company was founded in 2000 and now accounts for more than 50,000 rooms on the European hospitality market. In 2018, the investor had 18 brands in its hotel portfolio in 5 countries: France, Germany, Spain, Belgium and the United-Kingdom. RoomMate (one property in Spain) and Meininger (in France and Germany) are among its partners along with more “traditional” hotel operators. “A promising European adventure is on the way!” declared Dominique Ozanne, CEO of Covivio Hotels, end 2018.
Three pillars are behind the investor’s strategy: development, Euro-centric and customer-centric approaches. 1.9 billion euros were invested in 2018 and almost the same amount of assets were sold, which is a good way to keep the machine running at full speed. But how to create value? What leverage should be adopted?
Self examination has enabled Covivio to find new sources of value with its partners. “Real Estate is a local business”; local knowledge makes it possible for the company to maximize its yield. It defines itself as a “business partner”. “Covivio can find the ground, develop a project from A to Z, invest in premises or business and premises, or support a brand’s launch.”
In 2018, the firm acquired a portfolio from Starwood Capital in the United Kingdom worth 976 million euros. It was composed of 14 properties operated under IHG brands. In 2019, it acquired a €176 million portfolio from Accor, hotels in France and Belgium. What’s next for Covivio?
A full pipeline, successful debt reduction, Covivio is riding the European real estate market's wave of good health and reaping the benefits of long-term work. The investor is continuing to tighten its hotel assets for a move upmarket in its portfolio by selling 30 B&B hotels located in France for €113 million with an announced margin of 13%.