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Mandarin Oriental to Buy Hotel in Paris, France

Travel News Asia Latest Travel News Podcasts Videos Friday, 30 November 2012
 

Mandarin Oriental has, pursuant to a preliminary sale agreement, acquired an option to purchase the freehold interest in the building housing the Mandarin Oriental, Paris and two prime street front retail units from Socit Foncire Lyonnaise for 290 million (US$374 million).

The group has paid a 10 million (US$12.9 million) advance deposit to secure the option, and, if the option is exercised, the group will be required to pay a further 280 million (US$361 million) to acquire the property. The option will expire if the sale is not completed by 15 February 2013.

Mandarin Oriental currently has a 12-year lease on the hotel, which commenced on 18 April 2011, and which is renewable for a further 12 years, while the retail units are leased by SFL to third party tenants.

The transaction is expected to be partly funded by new five-year 150 million (US$193 million) debt facilities, with the balance to be met from the groups cash reserves.

The transaction requires the approval of shareholders. Completion of the transaction is expected to occur shortly after shareholders approval has been obtained.

Jardine Strategic Holdings Limited, which holds a 73.7% direct interest in Mandarin Oriental International Limited, has given its undertaking to vote in favour of the Transaction.

Edouard Ettedgui, Group Chief Executive, said, We believe that the transaction offers a rare opportunity to acquire a prime piece of real estate in a key gateway city which is an important destination for our luxury brand.

The property is located on the prestigious Rue St Honor, within walking distance of many of the citys famous cultural attractions and world class retail outlets.

The property has a net lettable floor area of approximately 17,400 sq. m., and had rental income of 10.6 million (US$13.7 million) for the 12 months ended 31 October 2012.

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