The hotels are predominantly located in established city center locations across the UK, with a weighting towards London, according to Land Securities. As part of the deal, Accord will operate the hotels under 12-year variable leases and the new owner will invest 68.67 million (euro 53 million) to upgrade the properties.
The leases are renewable six times, for a total of 84 years. The associated rents will be based on an average 21% of annual revenues with no guaranteed minimum. The variable rent for 2006 would have amounted to $53.12 million (euro 41 million).
Land Securities is a FTSE 100 company with a market value of more than $19.44 billion (euro 15 billion). The company owns property assets in England, Scotland and Northern Ireland.
Accor operates 4,000 hotels in nearly 100 countries with 160,000 employees. The sale will enable Accor to reduce its adjusted net debt by $756.87 million (euro 584 million). Accor's financial advisers were NM Rothschild & Sons; its legal and tax adviser was CMS Cameron Mc Kenna.
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