AURELIUS sells the GHOTEL Group for EUR63m to Art Invest Real Estate
AURELIUS Equity Opportunities is selling its subsidiary GHOTEL hotel & living to the Cologne-based Art-Invest Real Estate Group. The purchase price is EUR 63 million (enterprise value), including subsequent components.
Art-Invest Real Estate engages in real estate development, and also makes hotel investments and operates hotels through several investment vehicles. The GHOTEL Group has belonged to the equity investment portfolio of the AURELIUS Group already since 2006. During this time, it was developed into a fast-growing, dynamic operator of business hotels with currently 17 locations. The sale of GHOTEL is expected to close in the first quarter of 2020.
AURELIUS will book a positive earnings effect of almost EUR 50 million from this transaction in the 2020 financial year. AURELIUS will therefore achieve a total liquidity related return of around EUR 73 million over the period of its investment in the GHOTEL Group after investing almost EUR 7 million of its own funds in the group’s growth during this time.
From Deutsche Post residential facilities to a dynamic business 3- and 4-star hotel chain
AURELIUS acquired the GHOTEL Group, still called “Deutsche Post Wohnen” at that time, from Deutsche Post in 2006 as a non-core division. The company’s origins can be traced to residential facilities that Deutsche Post had operated for its own employees in the 1960s and 70s. Afterwards, they were converted to a hotel chain due to the previously low occupancy rates. After being acquired by AURELIUS, the main focus was to modernise the hotels and change the organisation. As part of a successful reorientation, the company was renamed “GHOTEL hotel & living” and developed into a chain of modern 3-star and 4-star hotels for business travelers on the basis of extensive marketing and distribution measures. Among other steps, hotel reservation systems were introduced to improve online bookability and marketing was intensified via traditional sales channels such as tour operators, travel agencies and trade fairs. After the rebranding, substantial investments were made to renovate and modernize the individual locations. Convenience was enhanced by lengthening reception desk hours, free Wifi, providing parking spaces, improving the quality of breakfast and introducing reliable quality standards throughout the hotel chain.
Strong growth primarily thanks to a successful buy-and-build strategy
During the time it belonged to AURELIUS, the GHOTEL Group experienced dynamic growth mainly thanks to new openings and successful add-on acquisitions. In the past three years alone, revenues more than doubled to currently around EUR 60 million. In addition to new openings under the own brand GHOTEL hotel & living in Koblenz, Würzburg, Essen and Bochum, and the leasing of a GHOTEL hotel & living in Hamm (opening in 2023), the lease for which was just signed in December 2019, the portfolio was expanded significantly by means of add-on acquisitions. A total of 7 hotels were acquired by way of successor solutions since 2016 and operated under the proprietary brands GHOTEL hotel & living and nestor and under franchise brands such as Holiday Inn. In this respect, the Group benefits particularly from the further consolidation of the hotel market in favor of larger operator companies and attractive add-on potentials. Long-term framework agreements have been concluded with franchisors such as Accor and InterContinental Hotel. Six agreements for future locations have already been signed with Accor: Novotel and ibis Düsseldorf airport, ibis Styles, and ibis budget Bayreuth, ibis Styles München Neuperlach, and greet am Flughafen in Vienna.
The market for three to four-star hotels in Germany, particularly for business travelers, has experienced uninterrupted growth for years. The GHOTEL Group expects this positive growth to continue in the coming years. This expectation is backed by signed agreements to open eight additional hotel locations through 2023.
Buyer Art-Invest Real Estate will continue the expansion of the GHOTEL Group
“The GHOTEL Group was one of our first portfolio companies. After many years of belonging to AURELIUS, we are pleased to have found an ideal buyer for GHOTEL, Art-Invest Real Estate,” says Dr Dirk Markus, CEO of AURELIUS Equity Opportunities. “Our team put the company on a successful growth course, which the buyer can now develop further with its expertise in the real estate and hotel sector and its financial strength. I wish to thank the GHOTEL team most sincerely for their outstanding work over the past few years and wish them all the best in their continued expansion.”