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A Hong Kong based investment firm snaps up the Paris Marriott Hotel on the Champs-Elysées
A Hong Kong listed investment company has announced it is buying the Paris Marriott Hotel from French real estate company MCE PropCo. This luxury hotel is located on the Champs-Elysées in the center of Paris.
Kai Yuan Holdings Ltd., which invests in steelmaking and real estate, will pay €344.5 million ($468 million) for the hotel. It will finance the deal by borrowing $280 million from shareholder Du Shuanghua. Bank borrowing and internal resources will fund the balance.
Kai Yuan has a market value of $160 million. At news of the deal, Kai Yuan’s shares soared by more than 60%, having previously slumped since January.
The hotel’s clientele is predominantly American, French and Saudi Arabian but Kai Yuan is betting on an increase in Chinese visitors to the City of Light. The hotel’s occupancy rate is already 88%, but Kai Yuan says, “The Group believes there is potential to attract more Chinese customers and further improve the current occupancy rate”. It intends to expend more promotional effort in the Chinese market.
The Champs-Elysées is one of the world’s most famous streets. Located in the 8th arrondissement (district), this broad avenue runs from the Place de la Concorde to the Place Charles de Gaulle, with the Arc de Triomphe. It’s known for its cafés, cinemas and shops. Some prestigious addresses are in the area, including the Elysée Palace, the President’s official residence, and the U.S. embassy.
This is one of the wealthiest parts of Paris and real estate prices are among the highest in the city. On Avenue Montaigne, just off the Champs Elysees, prices can easily top €25,000/m2.
Marriott International Inc. will continue to run the hotel. The deadline for the completion of the deal is 5th September 2014.