CDL in talks to buy Hilton Paris Opera hotel from Blackstone at reported price of 244 million euros

CITY Developments Ltd (CDL) : C09 0%is close to sealing a deal to buy the Hilton Paris Opera hotel from asset management giant Blackstone for 244 million euros (S$356 million). 

The group is “currently engaged in discussions on the potential acquisition” of the 268-key hotel, CDL said in response to queries from The Business Times. 

Asian real-estate news website Mingtiandi reported on Sunday (Mar 3) that the reported price would translate to 910,448 euros per room for the acquisition from the Blackstone Real Estate Partners Europe IV fund.

CDL said in response to queries from The Business Times: “The group continues to pursue strategic acquisition opportunities to grow its footprint across key hospitality markets. This potential acquisition presents a rare opportunity to expand the Group’s hospitality presence in a key European gateway city ahead of the Paris 2024 Olympics.”

“We will make appropriate announcements to the market when there are material developments.” 

Blackstone acquired the Paris property in 2013 for 153 million euros, and changed its name from Concorde Opera to Hilton Paris Opera after a US$50 million renovation. (* see amendment note below)

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Located next to the Paris Saint-Lazare train station, the hotel is a 15-minute walk from the Eiffel Tower and near attractions such as Galeries Lafayette Haussmann and Opera Garnier. 

If the deal is completed, this will be the third hotel CDL has acquired in Paris. It also owns the 163-room M Social Hotel Paris Opera and the 239-room Millennium Hotel Paris Charles de Gaulle, under its subsidiary, Millennium & Copthorne Hotels. 

The Hilton hotel would also be CDL’s third major acquisition of a European property from Blackstone in recent years. 

In 2018, CDL bought London office building 125 Old Broad Street for £385 million (S$686.5 million at the 2018 exchange rate); in 2023, it completed its purchase of mixed-use estate St Katharine Docks for £395 million. 

For the full year ended Dec 31, 2023, CDL reported a net profit of S$317.3 million, down 75 per cent from S$1.3 billion in the previous corresponding period. Higher financing costs ate into the group’s profits, in the absence of divestment gains. 

Net gearing ratio rose to 61 per cent last year, from 51 per cent in FY2022, largely due to the S$2.4 billion in acquisitions CDL completed and paid out in 2023.

CDL spent close to S$1.3 billion acquiring two residential development sites in Woodlands and Toa Payoh in Singapore, and another S$891 million buying assets in the UK. These included St Katharine Docks and two private rented sector projects in Manchester and Greenwich. 

Hotel operations were strong last year, with revenue per available room for FY2023 up 25.3 per cent to S$168.70, and strong growth in Asia and New Zealand.

CDL will focus on strategic site acquisitions in 2024 to build its pipeline, the group said. It is also targeting divestments of S$1 billion this year, to recycle capital, said CDL chief executive Sherman Kwek. 

CDL Hospitality Trust will also “evaluate divestment opportunities to unlock asset values and optimise capital returns”.

Shares of CDL closed down 1.4 per cent or S$0.08 at S$5.62 on Monday. 

* Amendment note: An earlier version of the story cited a Mingtiandi report that Blackstone acquired the hotel for a reported 250 million euros. Blackstone has clarified that the hotel was acquired for 153 million euros.