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Accor sells German, Dutch hotels for €863 mln

Accor SA, Europe's largest hotel operator, agreed to sell 72 hotels in Germany and 19 in the Netherlands to Moor Park Real Estate for €863 million ($1.13 billion) to focus on running properties rather than owning them.

Accor SA will lease the hotels, which have a total of 12,000 rooms, from closely held Moor Park Real Estate for as long as 84 years, the Paris-based hotelier said today in a statement. Based on 2006 revenue, the French company said it would have paid rent of €49.5 million on the properties last year. „The terms of the operations are good for Accor,” Guillaume Rascoussier, an analyst at Oddo & Cie, said in a note. „We are convinced there is more to come in terms of asset management and cash returns.” He has an „add” recommendation on the stock.

Hotel companies are increasingly selling properties to focus on management contracts. Accor has sold more than 200 lodges in the past year including those in today's transaction. Accor last month sold 30 hotels in the UK to Land Securities Group Plc for £474 million (€693 million). „The transaction enables Accor to join forces with a company that is already established in the German real estate market,” Accor said today. „As part of the agreement a long-term development partnership will be launched, enabling Accor to step up its expansion program in Germany and the Netherlands.”

Accor said in September it plans to sell 535 hotels for €3.2 billion by the end of 2008. The company sold 261 properties for €1.6 billion in the previous 18 months. Today's transaction enables Accor to cut its adjusted net debt by €612 million, of which €215 million will be added to the group's cash reserves, the hotelier said. The sale and leaseback will add €5 million to pretax profit this year and €10 million in a full year, it said. Investors spent €21.6 billion buying hotels in Europe last year, 40% more than in 2005 and double the total for 2004, according to realtors Jones Lang LaSalle Inc. Shares of Accor fell €1.24, or 1.9%, to €65.37 at 11:31 a.m. in Paris, valuing the company at €13.9 billion. The stock has gained 26% in the past year. (Bloomberg)