NH Hotel partners with Covivio and adds eight new luxury hotels throughout Europe

This article was written and published in Spanish and has been translated into English via Google Translate. Click here to read the original article.

NH continues to take steps towards the transformation of the company in two directions: luxury real estate and rental agreements.

Those are the two signs of the contract were recently made public, in which the French real estate manager, Covivio, and the hotel company, NH Hotels, have agreed that the latter will be responsible for the operational management of a portfolio composed of eight luxury hotels and 1,115 rooms, the value of which would be around 500 or 600 million euros, according to real estate sources consulted. That would be the value of the recently closed transaction between Covivio and the Varde fund, which previously bought that portfolio in 2017 from the Italian group Boscolo.

There are four hotels in Italy, two in Hungary, one in the Czech Republic and one in France, of which six are five-star category and among which are such iconic buildings as the Palazzo Naiadi in Rome, with 238 rooms, or the New York Palace in Budapest, with 185 rooms. In a statement, the hotel highlights that the operation looks to strengthen its leadership position in Italy (where it already had 52 properties of the 371 of its portfolio) and increases its presence in competitive destinations in France and Eastern Europe.

"This agreement reinforces the collaboration between Covivio and NH, which began in 2014 and has allowed for profitable operations for both parties in the Netherlands and Germany during these years," said Ramón Aragonés, CEO of NH.

NH Hotels

Covivio is currently in an ambitious reform of the eight establishments, which will subsequently be relaunched under two of Minor's luxury brands (Anantara and NH Collection), a process that has already been carried out in different operations carried out in Spain, Ireland or even in Qatar, where Minor bought two hotels, of which one of them will be the first of the hotel company born in Spain in Asia.

The eight new hotels will be managed through a long-term variable rental agreement, with an initial duration of 15 years, extendable for a period not less than fifteen years and with a protection mechanism against possible losses. NH estimates that the transaction (the delivery of the hotels will be carried out in parallel) will occur at the end of the first half of 2020, except for the real estate of Nice and Florence, in the process of comprehensive reform, and whose delivery could be delayed until January 2021

62% of the portfolio is rent

Rental has become NH's favorite option to manage its hotel portfolio. The latest data submitted to the CNMV reveal that of the 371 hotels and 57,602 rooms it manages, 231 hotels and 34,901 rooms are for rent, which represents 62.2% of the hotels and 60.5% of the rooms.

Spain is still NH's main market, with 106 hotels, followed by Germany (57), Italy (52) and Holland (35). If the analysis is carried out taking into account the opening forecasts for the future, the company's focus is on Latin America, where 10 of the 24 hotels pending opening are concentrated.

This article was written and published in Spanish and has been translated into English via Google Translate. Click here to read the original article.

Join us February 26-27 for the Property Portal Watch Conference Bangkok 2020.