Completion of Covivio Hotels’ €573 mln acquisition of the Dedica Anthology portfolio has been postponed to September amid the current health crisis, the French firm said in a statement.
Covivio Hotels, the hotel arm of French listed property giant Covivio, agreed the €573 mln hotel buy in January and initially expected to close the deal by the end of June. The acquisition from US private equity firm Varde Partners marks Covivio’s debut in Italian hotels and includes eight iconic hotel properties in the hard-hit tourist cities of Venice, Rome, Florence, Prague, Budapest and Nice for a total of 1,115 rooms.
While the group has confirmed it is still on board together with operator, NH Hotels, which has agreed to lease back the assets under a 15-year rental agreement, the delay highlights the two partners' desire to take ownership of the assets once the current health crisis will – supposedly - be largely over.
Covivio's hotel business has strongly been affected by the pandemic and travel restrictions. In its first-quarter result announcement, Covivio said hotel revenues dropped 10% year-on-year to €53 mln at end March.
Covivio is making many of its hotels available as emergency accommodation in France and Spain. In addition, the group will also offer hospital staff from Metz, a city especially hard hit by the crisis and home to the company's head offices, nearly 2,000 free overnights in its hotels.
The group, which invests in offices, residential and hotels, has also announced measures to support its smaller tenants by providing a three-month rent cancellation for all its smaller occupiers affected by the closure orders. For SMEs in difficulty, Covivio allows for monthly payments or rent postponements.