Target Information

Anaxago is offering a unique opportunity to invest in a 3-star hotel located in the 18th arrondissement of Paris, comprising 48 rooms. This establishment is situated between the Saint Pierre market and the iconic Basilica of Sacré-Cœur, making it ideally positioned near popular tourist attractions. Anaxago’s strategy involves renovating the hotel to enhance its concept, decor, and furniture, and optimizing operational management in collaboration with the asset manager, Capital Hospitality Europe, in order to improve the Revenue Per Available Room (RevPAR).

The hotel currently enjoys a strong occupancy rate at 83%, reflecting its appeal as a travel destination. The acquisition aims for an internal rate of return (IRR) in the range of 9.1% to 13.3% over a four-year period, factoring in an anticipated bank debt of approximately €6.5 million, with preliminary agreements secured from three banks.

Industry Overview in France

The hospitality sector has increasingly become a significant component of real estate investments in France, even though transaction volumes have historically been modest, typically ranging between €0.5 billion and €2.5 billion annually since the late 2000s. In the first quarter of 2024, however, the hotel asset class surged to the forefront of real estate investments, drawing nearly €1 billion in capital.

This growth illustrates a shift in investor sentiment towards hotels, which, despite their historical alternative investment classification, are now recognized for their potential in generating steady returns. The increasing demand for unique and memorable lodging experiences may be driving this trend.

Moreover, France’s tourism sector remains robust, bolstered by its global reputation as a travel destination. The strong performance of existing hotels and the continual influx of international visitors create a favorable environment for investment, particularly in well-located and managed properties.

As the industry adapts to changing market conditions, new investment opportunities, like the acquisition proposed by Anaxago, play a crucial role in capitalizing on the evolving landscape of the hospitality market in France.

The Rationale Behind the Deal

The investment in the Parisian hotel aligns with Anaxago’s strategy to enhance their asset portfolio in the hospitality sector. By targeting a property with a strong occupancy rate and recognized location, the initiative aims to capitalize on existing strengths while enhancing the asset’s value through strategic renovations.

The renovation plan, which includes improvements in decor and operational management, is expected to significantly boost the hotel’s appeal and financial performance, thereby increasing investor returns over the investment horizon.

Information about the Investor

Anaxago is a reputable investment platform specializing in real estate opportunities, particularly in the hospitality sector. With a diverse portfolio that includes 14 financed establishments and assets worth over €150 million, they are well-positioned to leverage their expertise in managing hotel projects.

Partnering with Capital Hospitality Europe, Anaxago is equipped with specialized knowledge in hotel management and development. This strategic collaboration enhances their ability to execute successful renovations and operational enhancements, ensuring that the investment yields high returns.

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The investment opportunity presented by Anaxago in the Parisian hotel sector is poised to be an attractive proposition for investors. With a strong projected IRR and a favorable location, the deal reflects a sound investment strategy that leverages both current market trends and the growing demand for quality accommodations.

The proactive management approach, combined with expert oversight from Capital Hospitality Europe, further mitigates risk and enhances the likelihood of achieving targeted returns. Moreover, the hotel’s existing strong occupancy rate indicates that there is already a solid customer base, which bodes well for the future financial performance post-renovation.

However, potential investors should remain aware of the inherent risks associated with real estate investments, particularly in hospitality, where external factors such as economic fluctuations and changes in tourism patterns can impact performance. Despite these challenges, the planned enhancements and strategic management could lead to a successful outcome.

In conclusion, this deal represents a promising opportunity within the dynamic environment of the French hospitality industry, appealing to those seeking a diversified and potentially lucrative investment.

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