Luxury-hotel operator Kempinski AG is in talks to manage or buy properties in Barcelona, Paris and Nice, France, as it seeks to expand its European business.
The Geneva-based company is in advanced negotiations with owners of the three hotels, Chief Operating Officer Duncan O’Rourke said yesterday. The deals should be completed by early next year, he said, declining to identify the properties.
“The iconic trophy assets in Europe never lose value,” O’Rourke said in an interview in Dubai. The hotelier’s first choice would be to secure the management contracts for the properties, and if that doesn’t happen it plans to buy them with other investors or alone, he said.
Hotel investment in Europe was resilient last year even as the region’s economies contracted, Jones Lang LaSalle Inc. (JLL) said in a report in February. Hotel transactions reached 8.5 billion euros ($11.2 billion), 4 percent less than the previous year. The U.K. had most of the deals with 2.3 billion euros of transactions, followed by France and Germany, Jones Lang said.
Katara Hospitality, a unit of Qatar’s sovereign-wealth fund, said last month it’s in talks to buy “iconic” hotels in London and Rome. AXA Real Estate Investment Managers said today it acquired the NH Grand Hotel Krasnapolsky, in the center of Amsterdam, from NH Hoteles SA for 157 million euros on behalf of a European and an Asian client.
Closely held Kempinski’s profit climbed 18 percent in 2012 to a record as business at hotels opened in the previous two years picked up, O’Rourke said.
“We are prepared to put equity in certain properties and buying a property outright would also be an option,” O’Rourke said.
Luxury hotels in the centers of the largest European cities would probably command 1.5 million euros to 1.7 million euros per room, he said.
To contact the reporter on this story: Zainab Fattah in Dubai on firstname.lastname@example.org
To contact the editor responsible for this story: Andrew Blackman at email@example.com