MILAN: French real estate firm Covivio has acquired four four-star hotels in Milan for €217 million ($247 million), accelerating its push into Southern Europe’s hospitality market, the company announced Wednesday.
The portfolio, totaling about 900 rooms, includes properties in the Scalo Farini area, Bicocca, Corso Buenos Aires and Piazzale Loreto — all neighborhoods well-served by public transit. The hotels have recently been renovated and will pursue LEED Gold or BREEAM “In Use – Very Good” certifications for energy performance and low environmental impact, Covivio said.
The deal was structured as a sale-leaseback with Invest Hospitality, which will continue to manage the properties. The 21-year lease agreements include a minimum guaranteed rent plus a variable component tied to hotel revenues.
Covivio said the acquisition offers a guaranteed minimum rental yield of 6% and a target yield of about 7% including variable rent.
“Milan is a market supported by robust demand in both the business and leisure segments,” Covivio said in a statement. The company already has a significant office presence in the Italian financial capital.
The transaction was carried out through Covivio’s hotel subsidiary, Covivio Hotels. The group’s share of the €217 million price is €115 million ($131 million).
Covivio, which holds €23.7 billion ($27 billion) in assets across Europe, is listed on Euronext Paris.