A Capital, a European private equity fund, has teamed up with the Louvre Hotels Group, the second-largest hotel group in Europe, to build 50 hotels in Germany for €300 million (HK$3.16 billion) over the next four to five years to tap the growing demand from Chinese tourists.
“We aim to attract tourists from emerging markets, particularly China, visiting Germany,” said Andre Loesekrug-Pietri, the founder and managing partner of A Capital Group, which has partnered with investors such as China’s sovereign wealth fund China Investment Corp.
The alliance announced its first acquisition of 10 hotels from the DHM Group. The acquisition and renovation cost for the 10 hotels would be about €100 million. The remaining €200 million would be used to finance the purchase of a further 40 hotels. The 10 hotels have 1,246 rooms located in gateway cities such as Frankfurt, Cologne, Dortmund, Bremen and Mannheim.
“Currently, 70 per cent of these hotels’ customers come from Germany and the remaining from Europe,” Loesekrug-Pietri said.
Last year, 1.7 million tourists from mainland China and Hong Kong visited Germany, up 11 per cent from 2012, according to the German National Tourism Board. Germany is the second-most popular travel destination for Europeans since 2010, behind Spain, it said. The hotels will be renovated and rebranded under Tulip Inn and Golden Tulip brands and will be operated by the Louvre Hotels. A Capital has a majority stake in the venture.
A Capital is a private equity fund that invests in European firms to support their growth in emerging markets, particularly in China. Its track record includes transactions in Club Med and Bang & Olufsen. Matthieu Evrard, the chief development officer of Louvre Hotels, which has more than 1,100 hotels in 43 countries, said the partnership would allow the team to reach a critical size in Germany.
“With this transaction, we will double our footprint in the German market and we will create a platform for further investment in the near future,” he said.
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Article: South China Morning Post