12th Feb 2007 07:02
Land Securities Group Plc12 February 2007 12 February 2007 Land Securities Group PLC ("Land Securities") LAND SECURITIES TRILLIUM ACQUIRES ACCOR HOTEL PORTFOLIO Land Securities Group PLC announced today that its property partnershipbusiness, Land Securities Trillium ('LST'), has agreed heads of terms to acquirea portfolio of hotels from Accor S.A. ('Accor'), the fourth largest hoteloperator in the world. The portfolio comprises 30 hotels, representingapproximately a third of the hotels currently owned or operated by Accor in theUK. The transaction consideration is £439m with a commitment to contributearound £35m of capital over four years towards property improvement works.Rental income for each hotel is based on an agreed percentage of the hotel'sannual turnover. Based on 2006 performance, the portfolio would have generatedannual gross rent in excess of £27m per annum. LST will lease each hotel back to Accor on 84-year leases, which will include 12year rolling breaks, while retaining responsibility for the lifecyclemaintenance of the core fabric of the buildings. The 30 hotels, which areoperated under the IBIS two-star and Novotel three-star brands, arepredominantly located in established city centre locations across the UK, with aweighting towards London. It is expected that this portfolio will be included inthe REIT qualifying portfolio. Ian Ellis, Chief Executive, LST, said: "We have had a tremendous start to 2007with over £2bn committed to growing our business. Following on from thecompletion of the SMIF acquisition and our preferred bidder status on theDefence Training Review, this acquisition demonstrates the flexibility of ourbusiness model. It also represents the first step in the development of along-term relationship with Accor as its UK property partner, helping them toachieve their core objective of expanding their share of the UK hotels market. "The partnership model, which is exemplified by this transaction, advances LandSecurities' strategy of providing property solutions to leading corporations andgovernment institutions." Jacques Stern, Chief Financial Officer, Accor SA, added: "Accor are pleased tobe entering a partnership with a leading player in the UK property market. Thispartnership, as part of Accor's real estate management strategy, will allowAccor to accelerate its expansion plan in the UK and de-risk its operationalstructure by moving to a fully variable lease arrangement." Accor were advised by NM Rothschild & Sons. For further information, please contact:Ian Ellis Stephanie HighettLand Securities Trillium Financial DynamicsT +44 (0)20 7796 5500 T +44 (0)20 7831 3113 Notes to Editors Land Securities Trillium Part of the Land Securities Group, Land Securities Trillium is one of the mostestablished and innovative names in property outsourcing. We focus onunderstanding our customers' business and property requirements and meeting themthrough excellent service and innovation. We manage and provide services tonumerous commercial properties nationwide, for a growing number of companies andgovernment departments. These activities sit alongside Land Securities'investment portfolio, worth many billions of pounds, which includes a vast rangeof shopping centres and retail parks as well as London landmark buildings. Weare also involved in a major urban community development programme. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Land Securities