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Covivio to buy 8 European hotels for €573M

Covivio, through its subsidiary Covivio Hotels, agreed to buy a portfolio of eight hotels in major European cities from Värde Partners Inc. for €573 million, including capital expenditures.

The French property company is set to acquire the 1,115-room prime hotel portfolio, which includes Palazzo Naiadi Roma, Dei Dogi Venezia, Bellini Venezia and Palazzo Gaddi Florence in Italy; Hotel Plaza Nice in France; NY Palace Budapest and NY Residence Budapest in Hungary; and Carlo IV Prague in Czech Republic.

The properties will be operated under NH Hotel Group SA's brands NH Collection, NH Hotels and Anantara Hotels & Resorts. The acquisition, with a yield target of 5.8%, will be completed at the end of the first half of 2020. Covivio and NH Hotel signed triple-net lease deals for the properties, excluding Hotel Plaza Nice, with an initial 15-year term. NH has an option to extend the lease to 30 years.

Meanwhile, Covivio acquired under a management contract a Hilton hotel in Dublin for €45.5 million and a 6.4% yield. The meeting rooms of the 120-room hotel will be converted into 10 additional rooms to be built until 2021. The conversion will generate a value creation of nearly 10%, according to a release.