Registration Document 2013
Consolidated Financial Statements And Notes
A.2. Real estate transactions
The main real estate transactions carried out by the Group in 2012 and 2013 were as follows:
2012 and 2013
“Sale & Variable Leaseback” transactions
“Sale & Management-back” transactions
“Sale & Franchise-back” transactions and outright sales
A.2.1. Sale &Variable Leaseback transactions
Sale & Variable Leaseback transactions consist of selling the
hotel property while continuing to manage the business, under a
variable-rent lease based on a percentage of revenue without any
guaranteed minimum. In addition, negotiations are conducted with
hotel owners to convert fixed-rent leases into variable rent leases.
In each of these transactions, Accor and its partner may undertake
commitments to refurbish the divested assets.These commitments
and the related expenditure incurred as of the closure date are
presented in note 40. Most sale and variable leaseback contracts
include a commitment by the Group to spend a specified amount on
hotel maintenance, generally expressed as a percentage of revenue.
The main sale & variable leaseback transaction carried out is the
sale & variable leaseback transaction carried out in 2012 with
the hotel real estate investment fund of Internos Real Investors
concerned two MGallery hotels in Germany and the Netherlands:
the MGallery Mondial AmDom in Cologne for €21 million (including
the €19 million fixed lease buyout cost paid by the investor)
and the MGallery Convent Hotel in Amsterdam for €24 million.
The transaction terms provide for the execution of a €12 million
renovation program, €7 million of which will be financed by the
buyer. Both hotels will continue to be operated by Accor under a
15-year commercial lease that will be renewable at Accor’s option.
The rent will represent an average of 21.5% of the annual revenue
generated by the hotels. Insurance costs, real estate taxes and
structural capital expenditures will be paid by the new owner.
The transaction enabled Accor to reduce adjusted net debt by a
cumulative €28 million at December 31, 2012.
The other transactions enabled Accor to reduce adjusted net debt
by a cumulative €32 million.
A.2.2. Sale & Management-back transactions
Sale and management-back transactions consist of selling the hotel
properties while continuing to manage the business, retaining a
minority interest depending on the circumstances.
The main sale & management back transactions carried out in 2012
and 2013 were as follows:
In 2012, Accor sold the Novotel Times Square in New York
under a sale & management-back agreement, for a total of
€160 million (€335,000 per room) including renovation work.The
cash proceeds from the sale amounted to €71 million and the
buyer also committed to complete a full renovation of the hotel
between 2012 and 2013, at an estimated cost of €89 million
based on a scope defined by Accor. The hotel remained open
while the work was being carried out. In addition, an earn-out
payment of up to €12 million may be received depending on
the results of the hotel after the refurbishment. This 480-room
hotel will continue to be operated by Accor under a long-term
management agreement. The buyer is a joint-venture formed
by two key players in the hotel property management business
in the United States: Chartres (Chartres Lodging Group, LLC)
and Apollo (Apollo Global Management, LLC). The transaction
enabled Accor to reduce adjusted net debt by a cumulative
€58 million at December 31, 2012. Moreover, Accor agreed to
provide financing for part of the new owner’s refurbishment
costs, through a €15 million loan, which had been disbursed in
full at December 31, 2013.The loan is repayable in February 2017.
In 2012, Accor sold under a sale & management-back contract,
the Novotel/ibis Sanyuan in Beijing to A-HTRUST, a listed Hotel
InvestmentTrusts in the Asia-Pacific region, in which Accor took
a 5.73% stake (see note 2.B.3). The transaction amounted to
€54 million. The transaction enabled Accor to reduce adjusted
net debt by €47 million accumulated at December 31, 2012.
In 2012, Accor refinanced the Pullman Paris Tour Eiffel through
a management contract. The Group, which took over the hotel
in early 2009 under a fixed lease agreement, will continue to
operate the hotel via a long term management contract. Under
the terms of the contract, Accor has agreed to waive repayment
of a receivable from the owner until 2032 at the latest unless
the management contract is rolled over. The present value of
the receivable is €20 million, net of a discounting adjustment of
€11 million. The hotel benefited from a refurbishment program
representing a €47 million investment. Accor acted as principal
for the renovation work under a property development contract
(see note 40). The work were paid for by the hotel’s buyer, with
part of the cost financed by a €15 million loan from Accor of
which €10 million must still be disbursed.The transaction enabled
Accor to reduce cumulative adjusted net debt by €59 million at
December 31, 2012.
Last, in 2012, Accor sold the Sofitel Paris La Défense under a sale
& management-back agreement, for a total value of €22 million
(€144,000 per room). The acquisition was carried out jointly by
Amundi Real Estate, a leader in third-party real estate asset
management, and Algonquin, a hospitality investor and asset
manager, which already owns seven hotels operated by Accor
through management or franchise contracts in France and the
United Kingdom.The transaction enabledAccor to reduce adjusted
net debt by €16 million accumulated at December 31, 2012.