Information on the Target

Anaxago presents an investment opportunity in a three-star hotel located in the 18th arrondissement of Paris, featuring 48 guest rooms. This strategic acquisition aims to renovate the property, enhancing its concept, decor, and furnishings while also optimizing operational management. The hotel is ideally situated between the bustling Saint Pierre market and the iconic Sacré-Cœur Basilica, attracting a high occupancy rate of 83% due to its proximity to major tourist attractions.

The business plan for this investment, executed in collaboration with Capital Hospitality Europe, an asset management firm specializing in the hospitality sector, will navigate the hotel’s modernization and bolster its revenue per available room (RevPAR). With a target internal rate of return (IRR) estimated between 9.1% and 13.3% over a 48-month period, this deal represents a promising addition to Anaxago's expanding portfolio.

Industry Overview in France

The hospitality sector in France has increasingly become a significant component of real estate investments, even as transaction volumes have remained modest compared to other asset types such as office spaces and retail. Since the end of the 2000s, annual transaction volumes in the hospitality sector have ranged from €0.5 billion to €2.5 billion. However, this sector notably surged in the first quarter of 2024, claiming the top spot for real estate investments with around €1 billion invested.

This upward trend in the hotel industry showcases relatively higher resilience and potential compared to traditional investment avenues, prompting investors to explore alternative asset classes. The shift toward hospitality investments can also be attributed to changing consumer behaviors, where preference for experiential travel is driving demand for unique lodging options over standard offerings.

Moreover, France's diverse tourist landscape, coupled with its status as a global travel destination, continues to spur growth in hotel occupancy rates and, consequently, the overall performance of the hospitality sector. Investments in this area are increasingly seen as viable for achieving consistent returns, making it an attractive industry for discerning investors.

The Rationale Behind the Deal

The primary rationale for this investment opportunity lies in the strategic location of the hotel, which is situated near some of Paris's most visited landmarks. With a strong historical occupancy rate of 83%, the property demonstrates a solid foundation for potential revenue growth. The planned renovations promise to elevate the hotel's appeal and increase its market competitiveness, supporting future profitability.

Additionally, the anticipated IRR between 9.1% and 13.3% reflects a favorable risk-reward profile, especially considering the support from a dedicated asset management partner. This approach mitigates potential operational challenges, ensuring the hotel's sustained success post-renovation.

Information About the Investor

Anaxago positions itself as a front-runner in alternative investments, with a particular emphasis on the hospitality sector. The firm has successfully financed 14 establishments, totaling 701 rooms and boasting over €150 million in asset value, thereby establishing a significant footprint within the real estate market.

With a robust track record of achieving average target returns of 9.9%, Anaxago’s strategic focus on hospitality aligns with evolving investment trends. By leveraging its experience, the firm seeks to continue maximizing value through refined investment strategies in distinctive hotel properties.

View of Dealert

Analyzing this investment opportunity, it appears to be a sound choice for investors seeking exposure to the resilient hospitality sector in France. The focus on a high-occupancy property in a sought-after location underlines the potential for substantial returns, particularly in a market that has demonstrated robustness even during economic fluctuations.

The collaboration with Capital Hospitality Europe further enhances the proposition by providing the necessary expertise to navigate the complexities of hotel operations and modernization. This added layer of professional management can significantly reduce risks associated with operational inefficiencies post-renovation.

Furthermore, the outlined target IRR reflects an appealing investment horizon, especially if the anticipated renovations successfully elevate the hotel’s market position. In conclusion, this opportunity not only capitalizes on a prime location but also operates under a well-structured plan that positions it for long-term sustainability and profitability.

View Original Article