Hotel Investor & Operator. December 2015

Transcription

1 Hotel Investor & Operator December 2015

2 A specialist in hotel investment and hotel management Algonquin s perimeter : 41 hotels (c. 7,100 rooms), including 16 directly-operated hotels (c. 1,700 rooms) Hotel investor & Operator since 1998, Algonquin is a private equity investment player which is directly involved with day-to-day hotel management This specific hotel know-how covers both day-to-day operational matters (such as the set-up of sales and marketing policies, the management of costs, human resources, health & safety regulations, etc.) as well as all real estate matters (in house project management expertise, commercial layout optimization, etc.) This is the reason why institutional investors, private equity firms and family offices have sought to benefit from Algonquin s know how as specialised hotel investor and asset manager through the creation of dedicated hotel ventures, in which Algonquin is always an investor, with equity stakes typically ranging from 2% to 50% depending on the size of the assets or portfolios involved 2 2

3 A portfolio of 41 hotels representing 7,100 rooms (Total AUM: 1.3bn) Leased to Intl. Chains 18% Room Split Directly operated by Algonquin 40% Managed by Intl. Chains 42% Germany 3% Poland 8% Italy 15% Belgium 9% UK 6% France 59% 3-star 17% 5-star 12% 4-star 71% 3 3

4 16 hotels (3,600 rooms) operated under management contracts Algonquin is an historical partner for international hotel operators Algonquin acts as an active owner and asset manager by supervising the operating performances of the operators London Antwerpen Brussels Warsaw Kraków Algonquin interacts most notably on revenue management and cost control optimization as well as in active real estate asset management (Capex) Nuremberg Offices Paris Milan Venice Cap d Ail Rome La Défense Colombes Saint- Denis Boulogne Paris Bercy 4 4

5 9 hotels (1,700 rooms) operated under lease or management lease agreements Liverpool Bristol York London Brussels Algonquin has invested in assets leased to large hotel operators, mainly through variable lease contracts where value creation is possible through an active asset management policy between Algonquin and the lessee Offices Paris Lyon Nice 5 5

6 16 directly-operated hotels (1,700 rooms) Through Algonquin s own brands or internationally renowned franchises Algonquin s in house team has been actively operating many hotels in Paris and France main regional cities (including ski resorts and Côte d Azur) for the past 12 years Disneyland Paris Reims Algonquin skills encompass marketing, sales, financial control, real estate project management, IT, web optimization and revenue management FRANCE Alpes Valence Toulouse Rayol-Canadel 6 6

7 Algonquin, hotel investor since hotels acquired over the past 15 years and 30 exits Track record last 8 years: Portfolio of 9 hotels 9 hotels / 1,236 rooms Number of hotels owned in said year Assets still held by Algonquin Sold assets Sale between 2013 and 2015 of 7 non strategic assets Portfolio of 3 hotels 3 hotels / 675 rooms 2 Boutique hotels in Paris 2 hotels / 61 rooms + 5 other Parisian hotels (164 rooms) Exitin2015fromaportfolioof7Parisian boutique hotels EquityIRR:12.1%over8years Portfolio of 3 mountain hotels 3 hotels / 450 rooms ( fonds de commerce only) Radisson Boulogne 170 rooms Sale in 2013 of the Aigle des Neiges EquityIRR:45,1% Courtyard Saint Denis 150 rooms Mercure, ibis and Holiday Inn Reims 3 hotels / 274 rooms Explorers Disneyland Paris 390 rooms Mercure Brigstow Bristol 116 rooms Novotel Edinburgh Park 150 rooms Holiday Inn Toulouse 119 rooms Ibis York 91 rooms Sofitel La Défense 150 rooms Courtyard Colombes 150 rooms Mercure Les Bossons Chamonix 89 rooms Sheraton Krakow (Poland) 232 rooms Sale in 2015 of the Novotel Edinburgh EquityIRR:25% Sale in 2014 of the Holiday Inn Reims, EquityIRR:38%,andoftheIbisStylesof Reims EquityIRR:56,5% Sale in 2014 of the Holiday Inn of Toulouse EquityIRR:51% Portfolio of 8 hotels 8 hotels & residences / 351 rooms The European Hotel Portfolio 8 hotels / 2,308 rooms Novotel Liverpool 209 rooms Radisson Blu/ Park Inn Antwerp 306 rooms Sale in 2015 of Hotel Kaya, Bailli de Suffren Resort, Chalets de Rosaël, Apparthotel Hévéa, and Atrium Hotel. Equity multiple: 2,5 times. 7 7

8 Value creation within the investment period Dedicated teams with offices in 3 countries Networks: brokers, operators, administrators, independent owners Examples of directly sourced deals over the past years: Mercure Reims Cathédrale(Foncière des Murs / Accor), Holiday Inn Reims (Alliance Hospitality), Ibis Styles Reims (Alliance Hospitality), Mercure Chamonix Les Bossons (Foncière des Murs / Accor), Courtyard Colombes(Host Hotels& Resorts), Sofitel La Défense(Accor) Constant monitoring of valuation and value creation Creation of a favorable context to exit the deal in the best possible conditions. Upstream identification of potential buyers Exit Sourcing / Analysis / Deal Flow Holding period Structuration of the equity & bank debt An established network of recurring coinvestors Strong relationships with numerous lending partners Depending on the risk/reward profile and size, Algonquin keeps a 5% to 50% equity stake in any of its investments Set upoftheinvestment vehiclewithcoinvestors including shareholders governance: drag/ tag-along / duration/ valuation/ right of veto, etc. Supervision of due diligences and audits, negotiation of legal documentation with the vendors Financial control: reporting, budget, management control, internal audit Legal: Legal follow-up Technical : investments follow-up, property management, project management in case of renovation, extension and conversion projects Platform for day to day operational support: reservations, sales& marketing, IT, media management, etc. Management of the relationship with third party operators if any 8 8

9 A solid set of lenders and investment partners Institutionnal investors Private Equity Wide range of lenders implanted in several European countries to quickly secure the most suitable financing for our operations A network of long term partners suited for any operation (size, location, management type ) HNWI, Family Offices Algonquin partners with a large set of recurring investors (HNWI, Family Offices, Private Equity, Institutionnal Investors ) which enables it to undertake any kind of operations (Management Contract, Lease, Management Lease, Directly-operated hotels) with different Risk / Reward profiles 9 9

10 A dedicated team of 29 professionals based in London, Paris and Brussels, well balanced between investment specialists and hotel industry professionals 12% Shareholders of Algonquin S.A. as of April % 41% Jean-Philippe Chomette BNP Paribas Développement Private Investors Management Jean-Philippe Chomette Founder & CEO 4% Frédéric de Brem Group Managing Director Financial Department Acquisition Department Real Estate Department Hotel Operations Asset Management Vincent Chamley Chief Financial Officer Stéphane Obadia MD -Head of Acquisition Charlie Besnier Head of Real Estate Maxime des Monstiers Chief Operating Officer Emmanuel Dissez Head of Asset Management UK/Belgium/ France 9 people 6 people 3 people 2 people 16 General Managers 2 people 10 10

11 Business Case 1 Acquisition of the Sheraton Krakow (Poland) December 2013 Asset Description Photos 5-star hotel opened in Outstanding location in Krakow s prestigious District One (Stare Miasto), on the banks of the river Wisla and overlooking the historic Wawel Castle 232 guest rooms, laid out over 7 floors 1 restaurant, 2 bar, 1 roof-top terrace and 8 meeting rooms (around 500sqm) gym, indoor pool, club floor with club lounge & souvenir shop parking: 30 underground spaces and 35 surface spaces Strengths& Opportunities, Weaknesses& Threats at acquisition STRENGTHS Recently-built asset(2004) with no(or limited) capex requirements A very distinctive and rare piece of freehold real estate, situated in one of central/eastern Europe s most sought after hotel markets (between 1995 and 2012 the Polish economy has shown consistent GDP growth, with an average growth rate for that period of 4.4%) Prime location within the city centre of Krakow at a walking distance from all major entertainment facilities and offering splendid views over the Wisla River and Wawel Castle Balanced business mix thanks to both corporate and leisure tourism Limited future supply Very promising infrastructure developments in the city (airport connectivity and extension, 36,000 sqm convention centre) WEAKNESSES Exposure to Polish Zloty exchange rate(to which Algonquin feels reasonably secure) Complex acquisition of a Swiss holding company Sourcing Direct Investment figures in k Acquisition Cost Stamp duty & Due Diligence Costs 425 Algonquin Acquisition Fees 375 Total Investment of which Equity of which Debt Co-investors Deal Motivations& Risk/Reward Profile Asset quality & location First partnership with Starwood Hotels and Resorts Strong risk reward profile 5-year,pre-carriedEquity IRR:18,4%(basecase)/22,4%(bestcase) 11 11

12 Business Case 2 Acquisition of the Courtyard Colombes (France) October 2013 Asset Description 4-starhotelopened in2006 LocatedontheBoulevardCharlesdeGaulle incolombes,hautsdeseine 150guestrooms 1restaurant,1bar,2meeting rooms Underground parking (50 parking spaces) Photos Strengths& Opportunities, Weaknesses& Threats at acquisition STRENGTHS Recent asset(2006) Attractive location in a developing business park, close to La Défense financial centre, a major demand generator in the area Strong basis of loyal& regular corporate clientele Hotel operated by Marriott Hotels, with whom Algonquin already has a strong relationship (ownerofthemarriotthotelincapd Ail, SouthofFrance) Algonquin already has a solid knowledge of the La Défense hotel market (owner of the Sofitel La Défense) WEAKNESSES Algonquin s scope of intervention is restricted by the existing management agreement with Marriott Hotels Deal Motivations& Risk/Reward Profile Sourcing Direct Investment figures in k Acquisition Cost FF&E Reserve buy-out 400 Stamp duty & Due Diligence Costs 1310 Algonquin Acquisition Fees 190 Total Investment of which Equity 6800 of which Debt Co-investors Asset quality & location Resilient cash flow and upside potential with regards to the expansion of the neighbouring business park Quality of Algonquin s track-record with Marriott Hotels(Marriott Cap d Ail Monaco/ Courtyard Saint-Denis), allowing for more involvement into day-to-day hotel management Existing management agreement including an owner s priority return Strong risk reward profile 5-year,pre-carried EquityIRR:c.15%(basecase) 12 12

13 Business Case 3 Acquisition of a 306 rooms Rezidor portfolio in Antwerp (Belgium) June 2015 Asset Description Two 3 and 4-star hotels located on one side of the historical Antwerp Central station and 500m away from the historical city center. Park Inn 3-starhotelopened in guestroomsover8floors 1 F&B outlet(breakfast only) Radisson Blu 4-starhotelbuilt in guestroomsover6floors 1 restaurant, 1 breakfast area, 1 bar, 18 meeting rooms(1,900m²) Fitness, pool and Aquatopia aquarium Underground parking (107 parking spaces) Strengths& Opportunities, Weaknesses& Threats at acquisition Photos STRENGTHS Recentlybuilt assets(1997 fortheradissonblu, and2008fortheparkinn) PrimelocationinoneofthemostdynamicemploymentareainEuropethankstoitsworldclass sea port, petrochemical cluster and diamond industry Promising infrastructure development such as the 25,000m² convention center next door duetoopenin2016 Dynamic city with both leisure and corporate demand, from both domestic and international sources Limited branded supply, all the more with the recent closure of the 174 rooms of the Radisson Park Lane and no further hotel development projects in the city Repositioning opportunity through an important capex program at the Radisson Blu WEAKNESSES Though a number of projects will soon revitalize the Central Station environment, the area currently lacks coherence Sourcing JLL Main Investment figures in k Enterprise Value ~ Extensive Refurb. Program ~7 000 Total Cost ~ Co-investors 10% 90% Algonquin KKR Deal Motivations& Risk/Reward Profile Financing Debt Asset quality & location Capitalizing on long time relationship between Algonquin and Rezidor Risk Reward: high Value creation through: Creation of a retail center from an outdated existing aquarium Increase of the operational performance thanks to a comprehensive refurbishment program 13 13

14 Business Case 4 Acquisition of the European Hotel Portfolio (Europe) October 2015 Asset Description Portfolio of eight 4 to 5-star hotels located around Europe: 5-star Westin Milan with 227 rooms 5-star Meridien Nuremberg with 192 rooms 5-star Sheraton Warsaw with 350 rooms 5-star Westin Venice with 185 rooms 4-star Pullman Paris Bercy with 396 rooms 4-star Sheraton Rome with 640 rooms 4-star Marriott Renaissance Brussels with 262 rooms 4-star Marriott Executive Appts with 56 rooms Photos Strengths& Opportunities, Weaknesses& Threats at acquisition STRENGTHS Mostly central locations in primary European cities Large assets with strong bottom line Good growth fundamentals as the portfolio is well positioned to capitalise on the anticipated European economic recovery Value add opportunities through re-branding and re-positioning of some of the hotels. Sourcing Eastdil Secured Investment figures Co-investors 5% WEAKNESSES Asset management intensive in k Enterprise Value > Extensive Refurb. Program ~ Total Cost > % 47.5% Algonquin Benson Elliot Walton Street Deal Motivations& Risk/Reward Profile Financing Debt Quality assets in prime locations across several primary European cities, excellent exposure Complicated acquisition process and asset management, limiting the number of competing bidders Hotels managed by trusted operators of Starwood, Marriott, and Accor Performance still below the 2007 peak, seems to have already reached the trough Value creation through: Intensive Asset Management Capex programs 14 14

15 Business Case 5 Acquisition of the Marriott Renaissance and Executive Apts in Brussels (Belgium) October 2015 Asset Description 4-star hotel and 4-star Aparthotel adjacent to each other in Brussels European Quarter, one block from the EU Parliament: Photos Renaissance Hotel 4-starhotelpurposebuilt in en-suite bedrooms incl. 24 suites 1restaurantand1bar Indoor pool Business Center Underground parking garage Marriott Executive Appartments 4-starhotelbuilt in rooms for one to two persons with a kitchen, dining area, bedrooms, bathroom(s) and private balcony 5meeting roomsover261m² Access to the hotel s amenities Strengths& Opportunities, Weaknesses& Threats at acquisition STRENGTHS Purpose built assets with well suited and designed facilities and product Good location in the heart of the administrative district within the European Quarter Good macroeconomics in Brussels, arrivals and bed nights have reached record highs over the last years Brussels is becoming an increasingly popular short-stay destination for the leisure segment Sourcing Eastdil Secured Main Investment figures Co-investors 2% WEAKNESSES Asset management intensive Value accretive capex challenge in k Enterprise Value ~ Capex ~3 000 Total Cost ~ Algonquin Aviva 98% Deal Motivations& Risk/Reward Profile Quality assets matching with a core development strategy Solid and recurring cash flow generating assets Further expansion of an already well established relationship between Marriott and Algonquin RiskReward:low 15 15