European Hotel Transactions 2004

This issue has been published by the London Office of HVS International 2005 Edition

Philippa Bock and Bernard Forster

good covenants, together with the availability of a buyer and the offer Introduction exceptional level of private equity and matching the vendor’s expectations. institutional capital becoming available. During 2004, HVS recorded a total of he European hotel industry staged 137 single asset hotel transactions of a good recovery in 2004, having more than €7.5 million, the minimum experienced significant instability T amount set for a transaction to qualify in recent times as a result of numerous European Single for inclusion in our survey. The total unprecedented events worldwide. The volume of single asset transactions was resilience of the hotel market, as proven Asset Transaction particularly impressive, resulting in a over the last three years, has resulted in Activity record level of investment; this hotel real estate now being considered a investment, at approximately €4 billion, mainstream asset class. Moreover, the ith no unprecedented events was 21% higher than it was the previous upside of hotels in a recovering market occurring in Europe during year. Single asset transactions accounted is very appealing, with the positive 2004 to send the industry into W for approximately 45% of the total leverage resulting from improved turmoil, the signs in late 2003 that many investment activity, less than the profitability creating a very attractive European markets were at the bottom of previous year; however, this was environment for investors. their cycles proved correct, with a understandable considering the strong In 2004, the European hotel number of European markets enjoying increase in portfolio activity following investment market shifted into top gear RevPAR growth in 2004. Although the subdued level of activity in 2003. with a tremendous increase in activity, in continental Europe experienced only Nevertheless, this volume of investment terms of both single asset and portfolio marginal growth, an exceptionally underpins the high level of buyer transactions. HVS recorded a 31% strong amount of investment in single demand, with strong upside sentiment increase in total investment activity in assets was made, with owners who had keeping prices high. 2004 compared with the previous year, endured the turbulence of the past few In 2004, Spain succeeded in being the to approximately €8.9 billion. Hotel years choosing to dispose of their assets. most active market for hotel investment activity was fuelled by a The criteria for deciding whether or not transactions, continuing the trend set the significant number of private investors to dispose of assets include the future previous year. Spain recorded a total of seeking opportunistic acquisitions and capital expenditure requirements 40 qualifying transactions representing by private equity investors that were following a period of deferred over 8,100 rooms and totalling over €1 stimulated by the growth in popularity maintenance as owners seek to billion, some 25% of the total single asset of innovative financial structures that maximise cash flow; the strategic fit of transaction activity in terms of give a combination of upside and the property within the portfolio as a investment volume. The UK also security. This outstanding level of whole; the opportunity of deploying enjoyed very strong liquidity, but had to investment confirms the weight of capital in a more efficient arena or the settle for second place behind Spain with money targeted at hotel real estate, in ability to earn superior returns; the 33 qualifying transactions totalling particular demand exists for assets with current local market conditions; the approximately €980 million. Germany, meanwhile, enjoyed a buoyant hotel Figure 1 Total Hotel Investment Volumes 1998–04 (€ millions) investment market, totalling around €370 million, and accounting for some 9% of the total transaction activity. Of the other main European countries, France, Italy, Ireland and the Netherlands all recorded a sizeable increase in single asset transaction activity by rooms sold in 2004. Meanwhile, following the expansion of the EU, with ten new members joining, investment activity in eastern European markets was prevalent as opportunistic investors looked to purchase real estate in strategic locations with repositioning potential. A total of 11 qualifying transactions took place in central and eastern Europe, representing 7% of total European investment volume. Elsewhere, Turkey and Cyprus were all Source: HVS International Research investment hot spots during 2004, a

HVS International European Hotel Transactions 2004 1 approximately 29% lower than the Figure 2 European Single Asset Hotel Transactions 1995–04 European average value per room recorded in the HVI of approximately €222,000 per room. The reason for this is 150 4,500 that within the HVI survey the sample of 140 4,000 hotels is limited to four-star and five-star 130 branded hotels located in primary cities, 120 3,500 whereas the HVS European Hotel 110 Transactions review includes all publicly 100 3,000 quoted hotel sales above €7.5 million 90 and encompasses assets positioned in 2,500 80 the budget, mid-market and luxury 70 2,000 hotel sectors. 60 50 1,500

40 Millions (Approximate) Portfolio € Number of Transactions Number of 1,000 30 Transaction 20 500 10 Activity 0 0 ollowing two years of subdued 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 investment activity in terms of Fportfolio transactions, 2004 Number of Transactions € Millions witnessed a significant rebound. The increase was driven by various factors such as companies disposing of non- Source: HVS International Research core, underperforming assets following a strategic review; an increasing trend to trend that is expected to continue in 2005 company based in Hong Kong, for separate the property asset from the € and beyond. approximately 108 million hotel business; and a wealth of capital € In 2004, the largest single asset to ( 571,000 per room). The deal is invested in the sector by venture transact was in Monaco, where the 619- understood to represent a yield of capitalists and private equity players room Monte Carlo Grand Hotel sold for less than 6%; seeking a portfolio with significant € ∑ more than a reported 200 million. The The 140-unit Grosvenor House potential for growth. landmark property was acquired by Serviced Apartments in London HVS International recorded 22 Cedar Capital Partners on behalf of FHR were sold by the Royal Bank of portfolio transactions in 2004, compared European Ventures, an equity fund Scotland to the property group with 13 the previous year. In 2004, backed by the Bank of Scotland, Bourne Capital in a deal estimated to portfolio activity amounted to € Fairmont Hotels and Kingdom Hotels be worth approximately 145 approximately €4.9 billion, an € International. The Monte Carlo Grand million ( 1,042,000 per apartment). impressive 39% increase on the previous Hotel has been rebranded as a Fairmont It is understood that a number of the € year. Nevertheless, portfolio transaction Hotel and will undergo a 40 million apartments will be sold for activity still remained some 45% below renovation. residential use, but with the option of the record level of activity in 2001 of The following were among other the inventory being placed into a €8.8 billion. notable single asset transactions in 2004. rental pool, thereby providing an In 2004, portfolio transactions were income stream to the owner when plentiful, reversing the trend of the ∑ The 98-room Le Richemond Hotel in they are not in use. previous two years. One significant Geneva, sold to Rocco Forte Hotels change witnessed was the increased € € for 64 million ( 660,000 per room); One significant difference in trend for partnerships between high-net- ∑ Two boutique hotels in Paris, the 70- transactional activity compared to the worth individuals formed through room Hotel Balzac and the 37-room previous year was the near lack of syndicates. As high-net-worth individuals Hotel de Vigny, sold to JJW Hotels & trophy assets transacting; as a often have lower equity return € € Resorts for 53.5 million ( 500,000 consequence, the average price per room thresholds, and benefit from tax-efficient per room); declined. In 2004, investment activity deal structuring, pricing levels can be ∑ The 73-room Sofitel Demeure centred to a greater extent on the mid- achieved that property funds and Marignan in Paris, sold to a high-net- market sector and on a greater number institutions cannot necessarily compete worth private investor for of hotels transacting in secondary with. The following are examples of this € approximately 27.5 million markets. Furthermore, the increased trend. (€377,000 per room); transaction activity in eastern Europe, ∑ The La Manga Resort in Murcia, sold together with hotel assets in Cyprus and ∑ Quinlan Private’s (the investment to the Spanish investment company Turkey, which typically command lower vehicle for the former Irish tax Med Group for €146 million; sale prices, had a negative impact on the inspector Derek Quinlan) acquisition ∑ The 168-room Radisson SAS Carlton total sales price per room. As a result of of the Savoy Group in a €1.1 billion Hotel in Bratislava, together with an all these factors, our survey shows a 9% deal from the Blackstone Group and office and retail complex, was decline in the average price per room, to Colony Capital. The price paid for acquired by a consortium of approximately €158,000. However, we the collection of four London hotels, investors including Patron Capital would stress that this contradicts the comprising 772 rooms, averages €1.5 Partners, Truthheim Invest and trend shown by hotel asset values in million per room, the highest price Nautical 1 for approximately €60 2004; values have increased by ever paid per room for a UK hotel asset. million; approximately 3%, as illustrated in the In January 2005, Quinlan Private ∑ The leasehold interest in the 189- HVS publication European Hotel proceeded to dispose of the 263-room room Howard Hotel in London was Valuation Index 2005 (HVI). In addition, Savoy Hotel for approximately €350 acquired by Samosir, a private the average transaction price per room is million (approximately €1,330,000

2 European Hotel Transactions 2004 HVS International Table 1 Selected Portfolio Transactions 2004 (€)

Number of Number of Total Sales Price per Portfolio Country Properties Rooms Price Room Buyer Savoy Group UK 4 772 1,162,300,000 1,506,000 Quinlan Group Queens Moat Houses UK/Netherlands/Germany 78 11,110 813,100,000 73,000 Whitehall 2001 Premier Lodge UK 141 10,062 758,800,000 75,000 Whitbread Travelodge UK 135 14,500 578,300,000 40,000 Prestbury Hotels Ltd Paramount Hotel Group UK 13 1,829 323,000,000 177,000 Dawnay Shore Hotels Dividum Finland 32 5,600 300,000,000 54,000 London and Regional Properties Home Invest AB Hotels Scandinavia 19 3,224 174,100,000 54,000 Capona Courtyard by Marriott UK 11 867 113,000,000 130,000 Syndicate of Private Investors Grubarges Portfolio Spain 5 1,068 105,000,000 98,000 Barcelo Hotels Hotel Du Vin UK 6 244 96,300,000 395,000 Marylebone Warwick Balfour Group Queens Moat Houses UK 4 488 57,200,000 117,000 Pederson Group Three Accor Properties UK 3 412 57,200,000 139,000 HerAx - Heron Corp & AXA Sun Life Alias Hotels UK 4 226 44,000,000 195,000 GuestInvest Carestel Belgium 7 728 34,300,000 47,000 Baupost/Westmont Hospitality Group Travelodge Ireland Ireland 8 520 22,200,000 43,000 Smorgs Ltd

Source: HVS International Research

per room) to FHR European Ventures; HerAx, which was established in of Thistle Hotels, Macdonald Hotels ∑ Dawnay Shore Hotels’ (the hotel 2003 by the property firm Heron and Jarvis Hotels in 2003, further group established by Dawnay Day Corporation and the insurance public-to-private deals took place in and Shore Capital) acquisition company AXA Sun Life, made its 2004, the only exception being that it from Alchemy Partners of the 13- first acquisition with a €57 million broadened the trend from being a strong Paramount Hotel Group for (£40 million) investment in three purely UK phenomenon. We outline the €323 million (£215 million), or Accor Hotels. The acquisition, which following public-to-private transactions approximately €177,000 per room. comprised the 106-room Ibis Hull, that took place in 2004. The deal was financed through the 124-room Novotel Milton Keynes equity and mezzanine finance and the 182-room Novotel London ∑ Pandox, a specialist hotel investment subscribed by clients of Shore Capital City South, involved Accor entering company, was privatised following and by senior debt provided by into a 25-year sale and leaseback the purchase by APES Holding AB of Anglo Irish Bank. A considerable agreement. The eventual aim of the a 36% stake in November 2003 and part of the equity finance came from HerAx fund, which intends to invest an unconditional offer of €12 per The Hotel Corporation plc, which in different asset classes, is to attract share. In January 2004, it was has been established as a public investment from other institutional announced that APES had attained a company trading on the Alternative investors to grow the fund from 96% holding in the company and that Investment Market (AIM) to enable €368 million to approximately €1.5 the compulsory purchase of the public company investors to invest billion within three years; outstanding shares would be called. directly into a private equity vehicle. ∑ Travelodge completed a €580 million Consequently, Pandox was delisted Such a structure is referred to as (£400 million) sale and leaseback deal from the Stockholm Stock Exchange public equity in private structured on 136 properties with Prestbury in February 2004. The public-to- enterprise (PEPSE). The Paramount Hotels Ltd that was estimated to be private transaction valued the Hotel Group was acquired in order approximately €40,000 per room. company at approximately €400 to provide a platform from which to Travelodge has engaged in leases million, equating to around €48,000 establish a substantial chain of four- ranging from 25 to 35 years and the per room; star UK regional hotels. In January deal is understood to be the first time ∑ A newly formed acquisition vehicle 2005, Dawnay Shore Hotels a hotel group has completed the sale named Precinct Investments completed the acquisition of three and leaseback of its entire property acquired the publicly listed Irish Hanover Hotels, totalling 587 rooms, portfolio. Prestbury Hotels is backed hotel company Gresham Hotel for the sum of €82 million, or by the investment companies Group. The takeover resulted in the approximately €140,000 per room. A Prestbury Investment Holdings and company’s being taken private, with five-year investment plan is being West Coast Capital. the final offer of €1.40 per share considered, after which time the valuing the company at around group is likely to be sold in its In 2003, a number of public-to- €117.2 million, or around €118,000 entirety through an IPO, by transfer private deals took place as the various per room. to a REIT structure or sold to another management teams attempted to private equity buyer. rescue their publicly listed companies Another factor evident in hotel from the perils of the Stock Exchange, portfolio investment activity during Sale and leaseback deals featured following a severely depressed share 2004 was the wide variety of investment prominently in portfolio transactions price as the public markets lost capital available. Trade buyers, private during 2004, and following are some confidence in a cyclical industry equity, real estate investors and specialist examples. scarred by events such as the war in hotel investment companies were all Iraq, SARS and the global economic active. In 2004, other significant portfolio ∑ The property investment firm slowdown. Following the privatisation transactions included the following.

HVS International European Hotel Transactions 2004 3 ∑ The sale of the budget hotel chain of €174.1 million, Home Invest and 35 hotels in the UK either Premier Lodge by the Spirit Group to purchased six million newly issued branded as Moat House or under Whitbread, involving 141 hotels, shares, which translates into a 24.3% franchise to Holiday Inn; comprising over 10,000 rooms holding in Capona. The deal gives ∑ The private company Smorgs Ltd (including nine hotels currently the Swedish firm another 16 hotels in acquired Travelodge’s portfolio of under development) for €759 Sweden, two in Norway and one in eight hotels in Ireland, together million (£505 million), or Denmark; with the rights to the Travelodge approximately €75,000 per room ∑ LBO France, a private equity firm, franchise in Ireland for (£50,000). Whitbread agreed to invest acquired 28 Libertel Hotels in Paris approximately €22 million, or a further €48 million to complete the from ABC Hotels, a joint venture of around €43,000 per room. Two of the nine Premier Lodge sites currently Accor (30%), Blackstone (35%) and hotels are in Dublin, with other under development. Following the Colony (35%), for an undisclosed properties in Waterford, Cork, acquisition, the Premier Lodge sites sum. In total the portfolio comprised Limerick, Galway, Belfast and Derry. have been integrated into 1,835 rooms, of which the five largest Whitbread’s existing Travel Inn properties, which comprised 732 In 2005, we consider that an business, with the entire portfolio rooms, were to be rebranded as abundance of portfolio activity will being rebranded Premier Travel Inn. Mercure hotels, with Accor retaining occur, as the trend towards splitting The race for the portfolio was hotly the management contract. The hotel ownership from operation contested and much debate followed remaining 23 hotels will retain the becomes more prevalent. For this over the premium in the price paid Libertel name, and whilst being reason, we consider that hotel operators for the entire portfolio compared to marketed by Accor, they will be will become less frequent buyers of the cost of development of a new- managed by Finhotel, a company hotel real estate, with private equity, build, which is estimated to be created for this purpose by LBO institutional investors and high-net- between €50,000 and €60,000 per France; worth individuals emerging as the room. Nevertheless, the deal secures ∑ Whitehall 2001, a consortium dominant players. In 2005, it is a distinct Whitbread’s position as the largest comprising the Goldman Sachs possibility that portfolio activity will budget hotel operator in the UK; Group, Whitehall Street Real Estate be even more robust than it was in ∑ Whitbread exited the UK mid- Fund and Westmont Hospitality 2004, particularly if hotel operators market sector following the sale of its Group, acquired Queens Moat choose to divest themselves of 11 Courtyard by Marriott hotels, Houses for approximately €813 ownership, a move that has been comprising 867 rooms, to a group of million, by offering 90 pence for mooted by the likes of Whitbread, private investors for €113 million every pound of junior term debt and InterContinental Hotels Group and (£79 million). The hotels will be one penny per ordinary and Millennium & Copthorne. leased to Kew Green Hotels, which convertible share. The last few years will continue to operate the hotels had seen a deteriorating under the Courtyard by Marriott performance at Queens Moat Profile of Investors brand, through a franchise Houses, exacerbated by high fixed agreement with Marriott charges as well as a weakened ignificant changes in terms of the International. The sale represents a balance sheet. The deal is understood profile of investors occurred during key part of a €1.1 billion (£800 to be the best outcome for the S2004, in both single asset and million) asset disposal announced at troubled hotel company, with portfolio activity. When consolidating the company’s interim results Whitehall 2001 in a much stronger both single asset and portfolio activity, presentation, which is also likely to position to invest new capital and to three principal buyers emerged in 2004; see Whitbread enter into sale and provide a solid platform from which private equity investors accounted for manageback agreements on its to grow the business. The deal 27% of the activity, while hotel operators Marriott portfolio; involves 24 hotels in Germany, and high-net-worth individuals (or ∑ Marylebone Warwick Balfour, the branded as either Queens Hotels or syndicates of high-net-worth owners of the Malmaison hotel under franchise to Holiday Inn, 19 individuals) each accounted for 25% of chain, acquired the Hotel du Vin Bilderberg hotels in the Netherlands the total investment activity. portfolio, a collection of six boutique hotels, some 244 rooms, for €96 million, equivalent to €395,000 per room. The deal is understood to have Figure 3 Single Asset and Portfolio Investment Activity by Buyer been financed through a €245 Category 2004 million banking facility provided by the Bank of Scotland; ∑ The 32-strong Finnish Dividum hotel portfolio was sold to real estate investment firm London & Regional High-Net-Worth Properties. The portfolio comprised Individual Hotel Operator some 5,600 rooms and is thought to 25% 25% have transacted at around the book value of €300 million. The acquisition makes London & Institutional Regional Properties one of the Real Estate Investor biggest hotel property owners in Investor 7% Europe; 13% Private Equity ∑ Hotel Investment Swedish hotel and leisure company 27% Company Capona completed the purchase of 3% 19 hotels from Norwegian real estate company Home Invest. As payment for the properties, which were Source: HVS International Research reported as having a total book value

4 European Hotel Transactions 2004 HVS International Private equity remains an important source of capital (for portfolio Figure 4 Single Asset Investment Activity by Buyer Category 2000–04 transactions), despite declining by 53% on the previous year; however, it is important to appreciate that the share of 6% 6% the capital placed by private equity investors would have been considerably 6% 5% greater if the deal involving the 7% InterContinental Hotel Group’s owned assets in the UK, which are currently in exclusivity, were to have completed. The other significant change has been the rise of the high-net-worth investor, increasing by 82% compared with investment levels in 2003. We envisage that both private equity and high-net-worth individuals will continue to be dominant players in the Hotel OperatorInstitutional Investor Hotel Investment Company hotel investment arena, particularly as the industry’s structure is changing, Private Equity Real Estate Investor Private Company with the hotel operator becoming High-Net-Worth Individual further detached from hotel ownership. In respect of single asset transactions, Source: HVS International Research hotel operators were much less prevalent, compared to previous years, with investment totalling €940 million. albeit at a much reduced level compared hotel asset values are important drivers They accounted for 24% of the activity to the previous year. Private equity in the sector’s share price. There are two compared to 50% the previous year. A investments totalled approximately main reasons for this. First, the return on major shift in the investor profile came €1.75 billion, which accounted for 35% capital is extremely low and one primary with the emergence of a greater number of the total portfolio activity. The means of creating shareholder value is of high-net-worth individuals investing decline in private equity investors is due through asset disposals, which are in real estate. Acquisitions made by largely to fewer acquisitions being considered to be earnings enhancing (if high-net-worth individuals included the made by US-based funds, which were the book value is achieved). Second, Hilton and Ibis hotels in Prague by the particularly active in 2003. The increased asset prices remain robust with strong Quinn Group, the Mirabeau Hotel in numbers of hotels available on the demand from a wide source of Monaco by the Barclay Brothers and the market in the USA and an unfavourable investment capital. Marriott Marble Arch Hotel in London, exchange rate are the two main reasons The emergence of property, by Solomon Noe. Overall, high-net- why US investors have pooled resources institutional and private equity worth individuals represented some away from Europe. investors, as proven by the weight of 24% of total single asset activity, Hotel operators continued to present capital entering the sector, confirms the approximately €930 million, compared a significant proportion of portfolio acceptance of hotels as a mainstream to only 6% in 2003 (€171 million). deals. However, in 2004 hotel operators asset class. In recent years, sale and Private equity investors also became were also active buyers, as they leaseback deals have contributed to a more prominent in 2004, representing as continued to build a dominant global or change in the shape of the industry. they did 13% of the total single asset regional presence. In 2004, hotel Hotel operators by divesting themselves activity, with approximately €514 operator investment in portfolio deals of ownership of hotel assets in return million. This bucks the trend of private totalled approximately €1.3 billion, or for leases and management contracts equity investors typically preferring to some 26% of the total portfolio activity. have gained a considerable sum of invest in portfolio deals, due to the fact Meanwhile, in a pattern similar to capital that can be put towards that they need to place large sums of that seen with single asset activity, high- refurbishment and used to fund equity and are typically seeking a high net-worth individuals emerged in acquisition and development activity. return on investment. However, with the portfolio-related activity, with an Furthermore, their other advantage acquisition of the Radisson SAS in increasing trend for high-net-worth was that they were considered to be Bratislava, private equity investors have individuals investing in a portfolio of ‘off-balance sheet financing’, thereby started to show an interest in acquiring assets as part of a syndicate. The improving financial ratios. However, desirable assets in high-yielding acquisition of the Savoy Group by this advantage has been thwarted as, emerging markets. Other private equity Quinlan Private is an example of such an credit rating agencies capitalise lease acquisitions included the Monte Carlo investor type. In 2004, acquisitions made liabilities at around seven to eight Grand Hotel in Monaco by FHR by high-net-worth individuals totalled times the annual rental obligations, European Ventures and the La Manga €1.25 billion, or approximately 26% of which has become a real issue for listed Resort in Spain by the Med Group. the total portfolio activity. companies. Institutional investor activity within A further significant event, which hotel investment was scarcer than it had has impacted upon hotel operators’ been in previous years, with the majority perception of leases, at least within the of acquisitions made by German The Continuing UK, is the change to the Stamp Duty investment funds. DIFA was particularly Rise of Management Land Tax (SDLT) introduced in active investing in three hotels, the December 2003. The changes resulted in Radisson SAS in Manchester, the Contracts the SDLT charge being made on each Marriott in Hamburg and the Le real estate transaction, as opposed to a Meridien in Stuttgart. educing asset intensity appears to tax on documents. Furthermore, the tax In respect of portfolio transactions, be a key theme of hotel operators calculation is now based upon the capital sourced by private equity Rin today’s market. With most of discounted capitalised value of the continued to dominate portfolio activity, the major hotel operators publicly listed, rental payment as opposed to the

HVS International European Hotel Transactions 2004 5 Figure 5 Portfolio Investment Activity by Buyer Category 2000–04 UK Property Investment Funds – The Story So Far n March 2004 the UK government expressed its commitment to a UK Iequivalent of a Real Estate Investment Trust (REIT), to be known as property investment funds (PIFs). An 6% 5% REIT is a listed or listable portfolio real estate investment vehicle that has to distribute a substantial proportion of its income in return for exemption from corporation and capital gains tax. The UK government published an initial Hotel OperatorInstitutional Investor Hotel Investment Company consultation document in March 2004, following which a period of consultation Private Equity Real Estate Investor Private Company ensued. One of the main reasons to High-Net-Worth Individual establish UK PIFs is that the existing structures do not provide sufficient

Source: HVS International Research incentive for companies to retain property ownership in the UK, due to tax leakage. As a result many firms have set up offshore structures. A second main driver to establishing a PIF is their average annual passing rent. As a in popularity, particularly with the growing prevalence in other countries. consequence, normal operating leases growing trend of separating the Most recently, France introduced Société may be subject to up to nine times the ownership from the operations and as d’Investissements Immobiliers Cotées duty they were previously, which more capital becomes available that (SIIC) and in 2004 there have been a therefore has significant cost is likely to buy via management significant number of conversions of implications for the operator taking the agreements, such as experienced skilled existing property companies and funds hotel lease. owners and high net worth individuals. to SIICs. Consequently, hotel operators are The UK consultation paper states, increasingly favouring management however, that the proposed PIF should contracts, as opposed to leases when only be available for investment in structuring deals, as leases are Cross-Border property types where the rental returns increasingly viewed by operators as an Activity reflect the underlying property assets. expensive form of financing, whereby As such, PIFs would be restricted to they derive little of the benefits of uropean hotel investment is commercial, office and residential ownership, but take the added risk increasingly becoming a global property, while real estate that forms of exposure to upwards-only rent Eaffair. Cross-border deals part of a leisure or hospitality trading reviews, resulting in increased fixed continue to be facilitated by the euro, company, such as hotels, would be costs. Nevertheless, competitive buyers as it has allowed greater transparency excluded. By focusing on a market rent in Europe, such as institutional and increased the pool of potential as opposed to a turnover or profit rent, investors, still have a preference for lenders and investors seeking to invest key asset classes, such as shopping acquiring hotels with leases or long in European markets. The continued centres, have also been excluded. The guarantees, as building trust in the desire to diversify risk and reap the response to the consultation paper by operator, and monitoring and enforcing benefit of growth opportunities in hotel industry professionals and the the contract all take time and valuable different hotel markets has enticed wider property sector has been quite resources. A further downside of a further inter-regional and intra-regional substantial, resulting in a delay in the sale and manageback deal is the investment. introduction of PIFs, with a discussion challenge of selling on an asset that is In 2004, non-domestic transactions paper due to be published prior to the encumbered. totalled €4 billion, of which 39% 2005 budget. For this reason, we envisage that represented single asset transactions and Hotel lobbyists have undertaken a lease structures will continue to play an 61% portfolio transactions. In 2004, detailed response to the government’s important role in providing more secure approximately 59% of the single asset initial proposal, focusing first on and attractive investments. An example transactions involved investors educating the government on the of this is the purchase by DIFA of the purchasing assets in their country of importance of hotels as an asset class Marriott Hotel in Hamburg, with a lease origin, a similar trend to the previous and second on proposing ways in which structure in place, together with a year. A shift in portfolio transactions was it would be possible to structure a PIF to management contract, with a however more evident, with 50% of include hotels. Lobbyists argue that the guaranteed level of net income, backed investors purchasing assets outside of exclusion of hotels would deny investor up by the covenant of Strategic Hotel their country of origin; this is a choice, as the creation of PIFs would Capital. A deal structured in this way is noticeable increase on 2003, when over enable the setting up of vehicles by sufficient to qualify as a purchase under 70% of portfolio transactions involved which high-net-worth individuals could the regulations of German open-ended domestic buyers. invest directly into hotel property assets funds. While 2004 has witnessed a lower and in doing so permit even greater While some investors will continue number of US investors, interest from diversification of investment in property. to prefer leases, it is clear that Middle East and Asian buyers appeared Successful Hotel REITs exist in the management contracts will increase to be on the increase. USA. A similar format adopted in the

6 European Hotel Transactions 2004 HVS International significant upside is achievable with Figure 6 Cross-Border Activity – Single Asset and Portfolio improved profitability. Transactions 2001–04 Investor confidence in the hotel sector has been robust, with 2004 witnessing a 31% increase in the level of hotel investment, driven by a 21% increase in single asset transactions, to €4 billion, and a 39% rise in the level of portfolio activity to €4.9 billion. In addition to hotel operators and private equity capital continuing to invest strongly within the sector, high-net- worth-individuals have emerged as a prominent source of investment capital. In 2005, continued changes in the structure of hotel ownership are likely to see a continued reduction in the number of hotel operators owning hotels, while private equity investors and high-net- worth individuals are likely to extend their standing further. The future of PIFs in the UK and their inclusion of hotels currently remains uncertain, but if the government approves the widening of the scope of PIFs to include hotels, then Source: HVS International Research they are certainly likely to have a considerable impact on the UK hotel investment market, influencing once more the profile of investors. UK would be the most desired outcome including cheaper debt finance; and In 2005, we envisage the strong level for the UK hotel investment market. For improved quality of hotel real estate. of investment activity to continue, a hotel PIF to trade in the UK, it would While we remain positive in our belief driven by the continued weight of require the separation of the business that all-encompassing PIF structures will money targeted at hotel real estate. from the property. The hotel property be designed to incorporate hotels, it is Single asset investment is likely to asset would be owned by the PIF not beyond the realms of possibility for witness a greater number of quality directly, while the hotel business hotels to be excluded from the initial assets coming to the market as trading operated from the asset would be owned development of UK PIFs. If this does performance improves. With 2005 by a taxable operating subsidiary of the indeed occur, many of the pitfalls and having already witnessed the sale of The PIF. As rents would be the only form of costly errors incurred by the initial Savoy Hotel in London, the Shelbourne PIF-qualified income, the PIF would players would be ironed out in time for Hotel in Dublin and the Grand Hotel then grant a lease of the hotel asset to the the eventual entry of hotels. Europe in St Petersburg, this level of operating subsidiary, which reflects the The current trend for hotel activity is likely to be just a foretaste of underlying property asset. Under the ownership to be separate from the the market’s full potential. Other single rules of the PIF, the activities in which it operating business will become much assets on the market include, the can engage would be restricted, meaning more prevalent if UK hotels are to InterContinental Paris, the Hotel Danieli it is unlikely that the PIF can own a benefit from PIFs. What is certain is that in Venice and the Marriott Park Lane in brand or operate hotels; consequently, if PIFs are extended to include hotels, London. these activities would be contracted out then the hotel investment market, which Meanwhile, the trend for hotel to third parties. has been undergoing a period of operation to be separate from ownership Any profit from the operation of the profound change, is set for further is also likely to drive a significant hotel, after deduction of the transformation. proportion of portfolio investment management fee paid to the operating activity, particularly in the UK. The company and after deduction of the rent InterContinental Hotels Group is known paid to the PIF and any other qualifying Conclusions and to have a significant proportion of its UK expenditure, would be received by the property on the market; the sale of a taxable operating subsidiary which Outlook portfolio of 11 Hilton hotels currently on owns the hotel business; assuming a the market is understood to be nearing profit is made, tax would be payable in n 2004, with an upturn in trading completion, with further disposals the normal way. evident in a number of European planned; and Whitbread is mooted to The PIF discussion is much broader Imarkets, the sector witnessed a be engaged in a potential sale and than the brief synopsis of issues outlined significant amount of investment capital manageback deal. Meanwhile, the future here; however, the general consensus is from a wide spectrum of sources. With of Le Meridien is likely to be settled in that it would be highly advantageous turbulence in the public equity markets 2005. Investor confidence in the sector for the UK hotel investment market over the past few years many investors can be seen to be particularly robust, to increase the scope of PIFs to include have flocked to hotel real estate to which bodes well for the image of the hotels. The advantages of PIFs provide greater diversification within sector and its continued acceptance as a include improved liquidity; increased their portfolios. With the sector having mainstream asset class. diversification into the regional markets shown strong resilience throughout the and to mid-market and budget hotel extended period of economic downturn, brands in particular; increased the cyclical nature of the hotel business transparency in the real estate market; makes hotels even more appealing to access to a wider range of capital, investors in a recovering market, where

HVS International European Hotel Transactions 2004 7 ch AG ingin Osuuskaupp a-Elanto (HOK) Buyer Seller DB Real Estate Kaphag DB Real Estate Kaphag Reinbold Co.KG (Private Company) (Private Investors) Weinfurtner Quinn Group Highridge & DB Real Estate Global DIFA Aachener & Münchner Rixos Hotels Bulgarian Holding MultiGroup Arcotel Hotels & Resorts Operator Tour French Suomen Osuuskaupp ojen Keskuskunta (SOK) Hels Middle East Private Investor/JER Bouygues Sales Price per ) € yp Hotel Frankfurt Germany 177 21,000,000 119,000 LB Immoinvest Berlin GBI InterContinental Loipersdorf Loipersdorf Austria 300 20,000,000 67,000 Consortium of investorsAG (RIAG); Siemens Oesterrei Raiffeisen Sofitel Demeure Le Castille ParisMeliá Hotel Berlin France Berlin 107 31,100,000 Germany Holiday ParkTropen Nordsee 364 291,000 Tossens 81,000,000 Star Hotels Germany 223,000 320 Middle East Private Investor 8,600,000 Accor/Blackstone/Colony Capital 27,000 MAB Center Parcs EuropeAG EuroHypo PropertyArcotel WimbergerGrand Hotel Park - 87.51% StakeHotel Mlini (88.66% stake) DubrovnikHotel Split (68.08% Stake) City ViennaHilton Prague Dubrovnik nr. Croatia SplitRamada Presidentti Hotel Austria Croatia 162 CountrySofitel Demeure Marignan Rooms 443 225 Helsinki Croatia PragueHotel Balzac 7,400,000 Paris Price Not Disclosed Sales PriceCourtyard Neuilly 145 9,600,000 Finland 52,000 — Czech RepublicAccor Suitehotel 1,014 Room 24,000 11,700,000 495 FranceEtap Hotel Paris Ubertas Paris 145,000,000 119,000 Price Not DisclosedMercure Hotel 73 HBI - Hotel Company Berlin 143,000Courtyard by Marriott — FranceAlpe-Adria-Bank Hypo France 27,500,000Mövenpick Hotel Project Berlin 107 Quinn Group Germany Berlin 242 377,000Regent Hotel Düsseldorf The Croatian Privatisation Fund The Croatian Privatisation Fund 592 HamburgMeridien Stuttgart 53,500,000 Price Not Disclosed The Croatian Privatisation Fund Germany Richard Family GermanyMarriott Hotel Germany — 500,000 50,000,000Accor Suitehotel transaction above Included in Germany 139 120 MunichFitzpatrick Bunratty Hotel Highridge & DB Real Estate Global Stuttgart 226 84,000 JJW Hotels & Resorts 16,500,000 13,000,000 Bunratty Budapest Germany Accor/Blackstone/Colony Capital Confidential DB Real Estate Germany 119,000 108,000 183 281 Ireland — Pacific Investment Plc Hungary Price Not Disclosed Dock 13 MBH Price Not Disclosed Unknown 362 115 — — DB Real Estate Kaphag 48,900,000 13,000,000 135,000 113,000AG Hochtief Construction Unknown Patrizia Erste Bank Pugadar Host Marriott Fitzpatrick Hotel Group Holiday Inn Erlenhofpark Munich Unterhaching Germany 270 27,500,000 102,000 Undisclosed Erlenhostarkpr GMBH Marathon Beach HotelIbis Karlin LimassolAmi Hotel Bel Cyprus Hotel De Vigny Prague 130 ParisIbis Hotel Czech Republic Paris 7,300,000 Included in Hilton Prague transaction above Maritim Hotel Project 56,000 France FranceTr 115 Berlin Properties Ltd Lydgewood Marriott Hotel Dresden Included in Balzac Hotel transaction above Confidential Germany GermanyTours New Marathon —Accor Suitehotel transaction above Included in JJW Hotels & Resorts Hamburg 328Alba Regia Hotel Le Cabinet Bessé 60,000,000 Germany Pacific Investment Plc Szekesfehervar 277 183,000 Hungary Confidential Hospitality Westmont AXA Immobilien 104 — Price Not Disclosed — DIFAAG Hochtief Construction Forhecz Ingatlan Strategic Hotel Capital Undisclosed Libertas Hotel Dubrovnik Croatia 300 Price Not Disclosed — Le Metropole Beaulieu, Cote d’Azur France 43 17,000,000 395,000 Meridien Securities Unknown EUROPEAN SINGLE ASSET HOTEL TRANSACTIONS 2004 (

8 European Hotel Transactions 2004 HVS International te Tenerife II - Family Barberá Agrás II - Family Barberá Tenerife te ebel SA Occidental Hoteles y la Caixa Holding Hotel La Sies ical 1, Patron Capital and Truthheim InvestTruthheim ical 1, Patron Capital and Suez-Tract Buyer Seller Invalda Real Estate MG Baltic Predios del SuresteAguilar Antonio Reyes Sales Price per ) – continued € lands 410 Confidential — Invest West Dr Ebertz & Partners pain 249 32,000,000 129,000 Dunas Hoteles Steigenberger guineguin, Grand Canary S rnkey Project Barcelona Spain 126 25,000,000 198,000 Rafaelhoteles Castmor Jurys Inn Christchurch Dublin Ireland 185 9,000,000 49,000 Jurys Doyle Hotel Group Unknown Monte Carlo Grand Hotel Monte Carlo Monaco 619 Confidential — FHR European Ventures Undisclosed PropertyDublin Hotel - Finglas RoadKenmare Bay Hotel DublinThe Castletroy Park Hotel CitySofitel Hotel KerryDehon Hotel Limerick IrelandCiceroneLe Palme Hotel Country 96Ibis RoomsNH Laguna Palace Ireland Ireland Isola, VeniceEcotel Vilnius 15,000,000 Rome 107 137 Sales PriceMirabeau Hotel Sardinia Rome Italy 156,000 VeniceSteigenberger Kurhaus Hotel Room 25,000,000 7,000,000Ibis Hotel Italy 300 Vilnius Sesto FiorentinoPortimao Marina Hotel Italy The Hague Hotel Group McEniff 234,000 Italy Monte Carlo 51,000 ItalyZdravilisce Radenci Spa Resort Italy 165 ProjectTurnkey Silken Hotel 95,000,000 125 Radenci Netherlands Algarve ProjectTurnkey 292Silken Hotel Lithuania Private property company Monaco 384 220Almería Robert LyneGran Hotel 245 317,000 The Hague 7,000,000 Alicante 322Embajador 16,700,000 Dublin City Council 103 Coruna 70,000,000 SloveniaSteigenberger La Canaria 10,500,000 Portugal 13,100,000 Price Not Disclosed 46,000,000 42,000 Netherlands Middle East Private Investor 134,000 Private Individual Almeria Spain 357 240,000 38,700,000 196Hotel España 197 — 27,000 188,000 60,000 Spain Ar Pierre & VacancesParcela Hotelera 400 376,000 Rena Bianca Lee Hotel Chain Almeria CITAloha PlayaSol 17,700,000 SpA Danilo Coppola 14,000,000 14,500,000 SpainCáceres Golf NH Hoteles Private Investor Polis Key transaction aboveTurn Included in 50,000,000 50,000 Barclay Brothers 71,000 Barcelona 74,000 110 Spain Barcelona 125,000 Beni Stabili Benalmádena, Málaga 67 Silken Hoteles Sava Group Spain Espirito Santo Hotel Group Spain Private Investor 22,000,000 Country Village Undisclosed Cáceres Spain Undisclosed Silken Hoteles Price Not Disclosed Danielli 172 200,000 84 Ellerman Investments 230 Sifalalberghi Undisclosed — Spain 11,500,000Apartments Citymar Hotels and 13,200,000 Riofisa/Renfe Accor SA 103 23,000,000 Pivovarna Lasko 67,000 157,000 Riofisa/Renfe Almeria Servicios Hoteleros Gran Hotel 100,000 8,000,000 Private investor Grupo General de Relojeria AB Hoteles 78,000 Emilio Ballina Bao Alvarez SL Manuel Cordero Sol Meliá Hovisa Progemisa Jurys Inn GalwayJurys Limerick HotelGreif Hotel Galway Limerick Ireland Ireland Corvara 130 95Mövenpick Hotel Project Italy 11,000,000 9,800,000 60 85,000 AmsterdamRadisson SAS Carlton Hotel 103,000 10,000,000 Bratislava Jurys Doyle Hotel Group Nether Danesfield Ltd 167,000 Slovakia Unknown 168 Vacanze Tivigest Tu Doyle Hotel Group Jurys 60,000,000 — Undisclosed Naut La Siesta Arona Spain 282 15,000,000 53,000 Soteltur, Meliá Almunecar Almunecar Spain 227 24,000,000 106,000 Playa Senator Comarex EUROPEAN SINGLE ASSET HOTEL TRANSACTIONS 2004 (

HVS International European Hotel Transactions 2004 9 es Sales Price per ) – continued € Spain 54 Price Not DisclosedSpain — 219 Sunterra Corporation 18,000,000 82,000 Undisclosed Rambla Hoteles Construcciones Gomasper Lanzarote, Canary Islands Tenerife Puerto de la Cruz, Mar Holiday Resort – 50% stake 50% – Resort Holiday Mar Canary Islands Spain 677 150,000,000 222,000 Hermanos Santana CazorlaANFI TUI Group & del fi estin La Lanera Valencia Spain 145 30,000,000 207,000 Bancaja/Greco Project’ Barcelona ivoli Ibiza Spain 106 8,000,000 75,000 Grupo Playa Sol Fiesta Hotels Mindanao Hotel Madrid Spain 281 105,000,000 374,000 Nozar Grupo Inmobiliaro David Shamoon PropertyLido PalacePueblo AcantiladoAn La MotillaLas Dunas Beach HotelFuerteventura Playa City CampelloMare Nostrum Camp de Mar (Majorca) SpainMarco Polo EsteponaT Palmera Plaza G.Hotel 117 Fuerteventura Spain Dos HermanasH10 Paradise Island CountryJardines del Sol Spain Ibiza Rooms 120 Spain Spain 15,000,000 Jerez de la FronteraHotel Diana Park Ibiza 101 Spain Lanzarote 101 300 Sales PriceOasis Park 128,000 10,000,000Indamar Spain 52La Manga Resort 20,000,000 Room 83,000 12,000,000 20,000,000 SpainAguilas SpainHotel Las Málaga Torrequebrada, BMC.Family Clubs 528 SpainBarcelo Punta Umbria 198,000Bahía Park 12,000,000 119,000 107 290 67,000 BuyerMexico 350 Minorca Grupo FuertesOccidental Sevilla Murcia 20,000,000 231,000 Mojácar Middle Eastern Private investorEurotel G.Punta Rotja Punta Umbria 20,000,000 TRH Hoteles 8,000,000NH Sotogrande Hotels SL Sun & Beach Blau Hoteles 43,600,000 38,000Miramar de Calafell Hotel Spain SpainCervantes Prestige Hotels Spain 69,000 S´Arenal Private investor 75,000 Seville SpainW 125,000 Son Servera 187First Hotel G S´Arenal Grupo Playa Sol 298 Tarragona Grupo Boluda 420Aronsborg Conference Hotel Group of German investors Seller Sotogrande 72 Hoteles LopezDrei-Koenige Hotel Grupo Playa Sol Spain Spain Eastern Private investor Middle Private Investors Noga Hilton Complex Spain 8,100,000 15,000,000 Balsta Spain 146,000,000Le Richemond Hotel Spain Torremolinos 202 154 Spain Private Investors 12,000,000Falez Hotel 241 Asesoramiento y Direccion de Hotel 43,000 Gothenburg 50,000 212 112 Basel Accionistas — Price Not Disclosed 106 Geneva 167,000 Spain 12,000,000 Sweden Geneva Invisa Hoteles Group H10 Hotels Price Not Disclosed 25,000,000 Sweden — Roc Hotels BalearTurist. Punta Umbria 7,000,000 397 196 59,000 9,000,000 Inversiones Valma Med Group/Grove Capital — 305 Switzerland Switzerland Antalya 104,000 Switzerland 33,000 410 88 30,000,000 MLL 85,000 39,600,000 Hoteles 98 Hipotels 27,000,000 Private Investor Summa Hoteles Grubarges Turkey P&O Thomas Cook Confidential 202,000 76,000 Ramblas Hoteles SA 43,500,000 SotograndeAndalucia y Mar en Sol, Loz 89,000 64,700,000 340 494,000 — Hotels Scandinavia Choice Hotasa 660,000 Host Hoteleiendom Hoteles Piñero 23,500,000 Occidental Hoteles Unknown Mexiplaya Private Investor Private Investors Private Investor Sir Rocco Forte and Family (Luxury Hotels) Capona 69,000 Richemond Hotel Holdings SA HG Hoteles&Gestion NCC Property Development State bankTurkish Vakifbank, Accionistas Richemond Hotels Holding SA BNP Paribas & UBS Orsa Holding Occidental Coral Beach Marbella Spain 170 20,000,000 118,000 Inmob. Pontegadea Familia Chammas EUROPEAN SINGLE ASSET HOTEL TRANSACTIONS 2004 (

10 European Hotel Transactions 2004 HVS International nental Hotels Group/Modesole/Northern Assurance nental Hotels Group/Modesole/Northern Sales Price per ) – continued € 189 107,500,000 569,000 Samosir Balfour Marylebone Warwick UK LondonManchester UK 140 UK 360 145,900,000 1,042,000 75,500,000 Bourne Capital 210,000 DIFAScotland The Royal Bank of Company Investment Private Offshore PropertyGrand Hotel MercureRobinson Select Maris HotelAberdeen City HotelRamada BellhouseDe Vere Marmaris DormyDe Vere Izmir AberdeenHoliday Inn - Gatwick CityDays Hotel DerbyEdinburgh Capital Moat House Turkey BeaconsfieldAndrewsOld Course Hotel, St UKThe County Hotel Turkey Crawley Edinburgh Bournemouth 293Dorset Square Hotel Fife Country UKDrury Lane Moat House Derby 185 98Caesar Hotel Rooms UK UKDays Inn 23,100,000 UK 136Thistle Hotel Islington Ipswich London London 8,600,000London Ryan Hotel Sales Price 9,000,000 UK 115 UK 79,000 111Sloane Square Moat House 238Quality Hotel Kensington 21,200,000 46,000 Room 92,000Ramada Jarvis Kensington London London UK 134 100 UK 21,300,000 UK LondonCrown Hotel Paddington Holdings Turkon 7,800,000 19,500,000 London 156,000 LondonHoliday Inn London Victoria London HotelBlake’s London Buyer Ozkardes Group 185,000 Festival Inns 76 50,800,000 38 163The Howard 8,600,000 70,000 UK 82,000 UK London LondonApartments The Grosvenor House Serviced UK Cain Hotel Group UK UKArchMarriott Marble 379,000 UK Unnamed Local Developer 86,000Jurys Inn 7,000,000 160 UK 16,400,000 12,600,000 375 Portland Hotels Private Investor Entesynonal Midland Hotel 105 UK 211Airport Radisson SAS Hotel Manchester 160 London UKArmy Pension Fund Turkish - Kohler Co OYAK 72 101,000 332,000 92,000The Peebles Hotel Hydro London GSC Property Holdings 82 London 30,100,000 55,000,000 Jarvis Hotels Sharrow Bay Country House Hotel Group De Vere 18,600,000 Group De Vere Seller 95Holiday Inn Preston 212 27,900,000 21,100,000 PenrithExpress by Holiday Inn 188,000 UKTravelodge - 10,500,000 TLLC Group Holdings Canada Life 147,000 Elizabeth Hotels Peebles London, Heathrow Manchester 18,800,000 177,000Radisson SAS InterContinental Hotels Queens Moat Houses UK 132,000 132,000Ramada Encore 22,400,000 53,000,000 Undisclosed UK 146,000 Queens Moat Houses Wigan Standish Moat House 51 229,000 Investment Group Derby Hotels & Metropolis Preston UK Kirkmore SecuritiesAirport Stansted Undisclosed UK Sloane Square Hotel Ltd UK Kosaido Corporation 240 236,000 250,000 Kirkmore Securities Sellar Property Group Wigan 364 Price Not Disclosed Heritable Western UKAirport Stansted Undisclosed 24 Hotels County Swansea 303 128 UK Global Investors Henderson 54,700,000 — HotelsTown London Hoteles Hesperia UK 23,300,000 255 Queens Moat Houses Thistle Hotels Price Not Disclosed UK 228,000 7,900,000 53,900,000 Fund Quercus 129 UK Thistle Hotels 64,000 500 — Phillimore Estates International Currency Exchange 10,900,000 178,000 329,000 124 Price Not Disclosed Private Investor - Solomon Noe Undisclosed 99 Hotels Jarvis Whitehall/Westmont 85,000 43,000 34,300,000 Blair Group McMillan Hotels Quintessential Hotels 10,300,000 Hotels Essen Von Price Not Disclosed Middle Eastern Private Investor 69,000 Anouska Hempel Centre Island Development Company Airport Hotel Partnership — 83,000 InterContinental Hotels Group Partnership Airport Hotel InterConti Britannia Hotels Peebles Hotel Hydropathic Ltd Private Individual BAA Pearl Hotels Lynton BAA Lynton BAA Lynton Bank of Scotland BDL Hotel Group EUROPEAN SINGLE ASSET HOTEL TRANSACTIONS 2004 (

HVS International European Hotel Transactions 2004 11 Offices and Services

Philippa Bock is a Senior Associate Europe North America HVS Washington DC with HVS International’s London HVS London HVS New York Suite 102 Office. She joined HVS International Russell Kett 372 Willis Avenue 1300 Piccard Drive in February 2000 having worked in Dominique Bourdais Mineola, NY, 11501 Rockville, MD, 20850 USA various management roles within Bernard Forster USA Karen Smith (516) 248-8828 the European hotel industry and (240) 683-7123 Elie Younes (516) 742-3059 (fax) (240) 683-7120 (fax) holds a first class BSc (Hons) degree HVS Hodges Ward Elliott HVS San Francisco in Hotel and Catering Management Charles Human Suite 620 from Oxford Brookes University. Rudy Reudelhuber HVS Chicago Philippa was responsible for the 116 New Montgomery Street Suite 1A San Francisco, CA, 94105 HVS Research department before joining the consultancy 14 Hallam Street 445 West Erie Street USA London W1W 6JG team in September 2001, during which time she pioneered (415) 896-0868 Chicago, IL, 60610 UK the successful news journal HVS Hospitality Enews. (415) 896-0516 (fax) USA Since then, she has conducted several valuation and (44) 20 7878-7700 (312) 587-9900 consultancy assignments in the UK and Europe. (44) 20 7436-3386 (fax) HVS Boulder (312) 587-9908 (fax) 2229 Broadway HVS Madrid Boulder, CO, 80302 HVS Phoenix Bernard Forster is a Director with Philippe Bijaoui USA 4913 E Mitchell Drive HVS International’s London Office. C/Capitán Haya, (planta 15) (303) 443-3933 He joined HVS International in 28020, Madrid (303) 443-4186 (fax) Phoenix, AZ, 85018 1997, previously working in the Spain USA IT sector as well as several years (34) 91 417-6937 HVS Vancouver (602) 667-6655 in various hotel operational (34) 91 556-2880 (fax) 4235 Prospect Road (602) 269-1864 (fax) N. Vancouver, BC, V7N 3L6 management roles in Switzerland Canada and London. Bernard holds an Asia HVS Weston, CT HVS Singapore (604) 988-9743 MSc in Property Investment from 262 Lyons Plain Road 100 Beach Road (604) 988-4625 (fax) Riversbend City University London, as well #32-04 Shaw Towers HVS Toronto Weston, CT, 06883 as a BSc in Hotel Management from Oxford Brookes 189702 University. He has advised on hotels throughout Europe, Suite 202 USA Singapore 2120 Queen Street East the Middle East and Africa. (203) 226-6000 (65) 6293-4415 Toronto, ON, M4E 1E2 (203) 221-0068 (fax) (65) 6293-5426 (fax) Canada (416) 686-2260 HVS Hong Kong (416) 686-2264 (fax) HVS Boston HVS SERVICES 183 Jade Villa 4th Floor Ngau Liu Chuk Yeung Road HVS Miami ● Valuation Services 607 Boylston Street Saikung Suite 216 Boston, MA, 02116 8925 SW 148th Street ● Consulting Services China USA (852) 2791-5868 Miami, FL, 33176 (617) 424-1515 ● HVS Hodges Ward Elliott (852) 2792 2358 (fax) USA (305) 378-0404 ● Timeshare Consulting & Resort HVS New Delhi (305) 378-4484 (fax) South America C-67, Anand Niketan HVS São Paulo HVS Dallas Development Services 2nd Floor Av. Brig. Faria Lima Suite 101 New Delhi, ND, 110021 1912 cj.7F ● Asset Management & Operational 2601 Sagebrush Drive India 01452-001 São Paulo/SP Flower Mound, TX, 75028 Advisory Services (91) 11 2410-1005 USA Brazil (91) 11 2410-1066 (fax) ● Executive Search Services (972) 899-5400 (55) 11 3093-2743 (972) 899-1022 (fax) (55) 11 3093-2783 (fax) ● Organisational Assessments/Performance Australia HVS Sydney HVS Denver HVS Buenos Aires Cultures Suite 101, Level 1 Suite 906 San Martin 640 – 4° Piso ● 5 Elizabeth Street 1777 South Harrison Street Convention, Sports & Entertainment Sydney, NSW, 2000 Denver, CO, 80210 (1004) – Buenos Aires Facilities Consulting Australia USA Argentina (612) 9233-1125 (303) 512-1222 (54) 11 4515-1461 ● Food & Beverage Services (612) 9233-1147 (fax) (303) 691-3799 (fax) (54) 11 4515-1462 (fax) ● Gaming Services © 2004 HVS International. All rights reserved. ● HVS Compass Interior Design ● Published by: Marketing Communications HVS International, 14 Hallam Street, London W1W 6JG ● Technology Strategies Tel: +44 (20) 7878 7700 Fax: +44 (20) 7436 3386 ● European Hotel Financing For further information please contact Philippa Bock or ● HVS/The Ference Group: Operational & Bernard Forster, or visit our website at: Management Strategy Development www.hvsinternational.com