REG - PPHE Hotel Grp Ltd - European Hospitality Real Estate Fund

PPHE HotelAnnouncement

02/03/2023 07:00

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RNS Number : 5945R  PPHE Hotel Group Limited  02 March 2023

 

 

 

 

 

2 March 2023

 

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014, as it forms part of domestic law by
virtue of The European Union (Withdrawal) Act 2018.

 

On publication of this information such information shall be considered to be
in the public domain.

 

PPHE Hotel Group Limited

("PPHE" or the "Group")

 

PPHE to launch a European Hospitality Real Estate Fund of up to €250 million
equity

 

Fund to enable strategic acquisition of new premium hotels across Europe

 

PPHE Hotel Group, the international hospitality real estate group which
develops, owns and operates hotels and resorts, is pleased to announce that it
is in advanced discussions with a potential cornerstone investor with a view
to launching a new European Hospitality Real Estate Fund ("the Fund") of up to
€250 million equity. It is the intention of PPHE that the Fund will launch
with the initial contribution of its existing asset in Rome and an equity
commitment of up to €75 million from a cornerstone investor (with an upper
limit of 49% participation). Launch would also be subject to regulatory
approval.

 

The Fund would enable the Group to further accelerate its strategy of
identifying, acquiring and developing attractive hotel assets across a range
of key European markets. This is consistent with PPHE's longstanding approach
to building shareholder value through the careful stewardship of its own
balance sheet and partnership with third party capital providers. Investors in
the Fund would be able to benefit from and tap into PPHE's integrated
owner-operator model, driving optimal operating performance through enhanced
access to world recognised brands as well as an uplift in real estate value.

 

The Fund would also further drive the growth and value of PPHE's scalable
hospitality management platform, as PPHE will be appointed as the hotel
management company for all hotels acquired through the Fund. PPHE is in
advanced discussions with a cornerstone investor and anticipates that the
transaction will sign imminently.  However, there can be no guarantee that
negotiations will ultimately be successful.  PPHE will make a further
announcement in due course.

 

PPHE intends to participate in the Fund for an amount up to €50 million in
cash and/or assets with a cornerstone investor participating for an amount up
to €75 million (with an upper limit of 49% participation). It is the
expectation that in the coming year, additional investors will be able to
participate for the remaining €125 million equity, following the receipt of
regulatory approval.

 

It is the intention of PPHE that the existing PPHE Rome asset, which is
currently undergoing refurbishment and repositioning ahead of its opening as
Italy's first art'otel will be contributed into the Fund as a seed asset by
PPHE, this hotel will be managed by the Group under its hospitality management
platform.

 

Boris Ivesha, President & CEO of PPHE Hotel Group, commented:

 

"This new Fund would represent another significant step forward for PPHE
strategically, as we continue to expand our leading portfolio of premium
hotels while also taking advantage of our unique flexible and scalable
in-house hospitality management platform. The Fund would enable us to
accelerate our ability to capture the attractive opportunities we see in front
of us, via the use of non-dilutive third-party capital, while also playing to
our strengths as a fully integrated acquiror, developer and manager of
attractive city centre hotels. This would also provide a compelling financial
return profile for all Fund investors, including PPHE, helping to further
drive our future growth and enhance returns for our own shareholders."

Fund Highlights

 

·      PPHE would enter into hotel management contracts for each of the
Fund's owned hotels, growing the hospitality management platform of PPHE as
the Fund hotel portfolio grows.

 

·      Where appropriate, PPHE would leverage its access to Radisson
Hotel Group's portfolio of brands, which provides instant access to global
distribution and booking platforms, reward programmes and customer databases,
and a wide range of commercial benefits.

 

·      Upon success of a further capital raise and achieving an IRR
target (Hurdle) rate during the Funds' entire lifecycle, PPHE would be able to
earn further incentives.

 

·      PPHE would have asset and development exposure from its
participation.

 

·      The Fund is intended to demonstrate the full asset lifecycle
approach inherent within PPHE's differentiated and fully integrated buy /
build / manage business model.

 

·      Attractive opportunities falling within the Fund's investment
criteria during the investment period shall be pursued through the Fund.

 

 

 Enquiries

 

 PPHE Hotel Group Limited                                      Tel: +31 (0)20 717 8600
 Daniel Kos, Chief Financial Officer & Executive Director
 Robert Henke, Executive Vice President of Commercial Affairs
 Hudson Sandler                                                Tel: +44 (0)20 7796 4133
 Wendy Baker / Charlotte Cobb / Ben Wilson                     pphe@hudsonsandler.com

 

Notes to Editors

 

PPHE Hotel Group is an international hospitality real estate company, with
a £2.0 billion portfolio, valued as at December 2022 by Savills
and Zagreb nekretnine Ltd (ZANE), of primarily prime freehold and long
leasehold assets in Europe.

 

Through its subsidiaries, jointly controlled entities and associates it owns,
co-owns, develops, leases, operates and franchises hospitality real estate.
Its portfolio includes full-service upscale, upper upscale and lifestyle
hotels in major gateway cities and regional centres, as well as hotel, resort
and campsite properties in select resort destinations. The Group's strategy is
to grow its portfolio of core upper upscale city centre hotels, leisure and
outdoor hospitality and hospitality management platform.

 

PPHE Hotel Group benefits from having an exclusive and perpetual licence from
the Radisson Hotel Group, one of the world's largest hotel groups, to develop
and operate Park Plaza® branded hotels and resorts in Europe, the Middle
East and Africa. In addition, PPHE Hotel Group wholly owns, and operates
under, the art'otel® brand and its Croatian subsidiary owns, and operates
under, the Arena Hotels & Apartments® and Arena Campsites® brands.

 

PPHE Hotel Group is a Guernsey registered company with shares listed on the
London Stock Exchange. PPHE Hotel Group also holds a controlling ownership
interest in Arena Hospitality Group, whose shares are listed on the Prime
market of the Zagreb Stock Exchange.

 

Company websites

www.pphe.com (http://www.pphe.com) | www.arenahospitalitygroup.com
(http://www.arenahospitalitygroup.com)

 

For reservations

www.parkplaza.com (http://www.parkplaza.com) | www.artotel.com
(http://www.artotel.com) |www.arenahotels.com (http://www.arenahotels.com) |
www.arenacampsites.com (http://www.arenacampsites.com)

 

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