Accor to Sell and Lease Back 80 Hotels Worldwide in 2006

Bloomberg - December 26, 2005

Accor SA, the world's fourth-largest hotel company, intends to sell and lease back 80 hotels next year as part a plan to raise cash to step up expansion in countries including Russia and China. The transactions will follow the divestment of 128 hotels in 2005 and mean the Paris-based hotelier is on track with its plan to raise a total of 400 million euros ($474 million) by tapping its real estate holdings, said a spokeswoman, who declined to be named, confirming a report in Le Figaro newspaper.

Accor, which plans to install Gilles Pelisson as chief executive next month, wants to accelerate growth by increasing the number of hotel rooms it runs by 20 percent to 550,000 by 2008. Reducing the capital tied up in real estate is key to funding the expansion, analysts have said.

"The entire hotel industry is selling property to fund growth," said Yves Marchal, head of the French unit of real estate consultant Jones Lang LaSalle, in an interview earlier this month. Accor shares have gained 42 percent this year, buoyed in part by its divestment plan. Accor had net debt of 2.2 billion euros at the end of last year, equivalent to about twice its operating profit.

The properties to be sold in 2006 are Novotel and Mercure units, Accor's mid-market brands. Sphere: Related Content