BY JAMES WILKINSON
In the biggest Australasian hotel move of the decade, Accor has entered into contracts to acquire Mirvac Group’s hotel management business and a 21.9% stake in the company’s Mirvac Wholesale Hotel Fund for AUD$255 million.
Quay West Resort Bunker Bay, Western Australia
The acquisition, once completed by June 30, 2012, will result in Accor re-branding at least 46 of the 48 properties, with two hotels in the Wholesale Fund currently operating under Marriott branding, being Sydney Marriott and Courtyard by Marriott North Ryde.
Accor is jointly taking a stake in the Wholesale Fund with Singapore-based Ascendas’ – one of Asia-Pacific’s leading providers of business space solutions – and once the acquisition is completed, the companies will have a combined 49.2% ownership.
Mirvac’s properties – currently under the Quay West Suites and Resorts, Sea Temple, The Sebel Hotels, Resorts and Residences and Citigate brands – are expected to be reflagged under Accor’s upscale, upper-upscale and luxury banners, including Novotel, Grand Mercure, MGallery, Pullman and Sofitel.
Accor’s acquisition of Mirvac’s 6,101 rooms will take its portfolio in Australia and New Zealand to 241 hotels (32,500 rooms) and the company’s Chief Operating Officer for Asia Pacific, Michael Issenberg says the move will strengthen Accor’s position in the region.
“This agreement is a major development for Accor in Asia Pacific,” he says. “It enhances our position as the largest operator in the region and offers strong synergies with our existing business in Australia and New Zealand.
“Mirvac’s hotels have performed very solidly in the marketplace, but the world of travel is changing rapidly and Accor is well positioned to provide these hotels with the resources necessary to respond to the next phase of evolution in the hotel industry, as well as access to key emerging markets – particularly China and India.”
Mirvac’s Managing Director Nick Collishaw says the company was happy with the outcome of the sale, which came at a 15% premium to the current value of the assets.
“The sale outcome is in line with Mirvac’s strategy and it is a transforming event for the hotel business as it becomes part of a globally recognised hospitality group,” he says.
The sale to Accor and Ascendas does not include The Como in Melbourne’s South Yarra – a site that is expected to be re-developed – or Mirvac’s 50% investment in Australian Travelodge hotels. Mirvac is reportedly “assessing options” to offload the Travelodge investment, of which the remainder of the company is owned by Toga.
Accor’s global Chairman and Chief Executive Officer, Denis Hennequin, says the Mirvac purchase is in line with the company’s development strategy, which includes 40,000 room openings per year in 2012 and 2013.
“This operation is a major success in a high growth market,” he says. “With our growth strategy which includes both organic growth and targeted acquisitions such as this one, enabled by our excellent financial situation, I am confident in our capacity to reach our objectives.
“With an accelerated growth of our offer, stronger brands, unique operational know-how and a dynamic asset management policy, Accor is today aligned with its ambition to become the global reference in the hotel industry,” he says.
Accor and Ascendas’ stake in the Mirvac Wholesale Hotel Fund will comprise seven hotels, including Citigate Central Sydney, Sydney Marriott Hotel, The Sebel Parramatta, The Sebel and Citigate King George Square Brisbane, The Sebel Cairns, The Sebel and Citigate Albert Park Melbourne, and the Courtyard by Marriott North Ryde.
Issenberg says the acquisition will not only add some award-winning, well performing hotels to the company’s portfolio, but a number of the industry’s leading hotel executives and rising stars.
“One of the major benefits of the acquisition will be to have access to Mirvac’s highly professional and skilled workforce,” he says.
“The injection of new ideas, fresh perspectives and genuine talent has always been welcomed by Accor and we will provide similar opportunities for Mirvac employees to grow their careers within the region and further afield.”
The contracts between Accor and Mirvac are subject to a number of conditions and approvals, including Foreign Investment Review Board and New Zealand’s Overseas Investment Office.