London - Success Stories

HVS Advises on one of the Most Prestigious New Hotels Proposed for Paris

Project

The client (Aareal Bank France) is one of the leading international property banks listed in Deutsche Börse's MDAX index. The bank has a presence in 14 European countries, in the US and in Singapore, and provides property financing solutions in more than 20 countries. Its client base includes large international property investors as well as top-quality national clients. With property financing volume around € 27 billion, Aareal Bank Group enjoys an excellent market position in property lending business. Up to now, Aareal Bank securitised around € 11 billion in loans originated from different continents, confirming its leading position in Europe, and it is for this division that HVS International London was commissioned to provide a feasibility study and appraisal for the highly exclusive latest addition to Paris's Hotel stock - the five-star Hotel Fouquet's Barriere. Groupe Lucien Barriere, an established hotel operator throughout France with 39 casinos, over 80 restaurants, and 16 upscale hotels, has agreed to take over the operation of the Hotel, the company's first in Paris.

The HVS Assignment

From field research and HVS International's extensive database, the performance of the five-star Parisienne hotel market was analysed in terms of segmentation, occupancy, average rate, RevPAR and other performance measures. In addition, the overall economic situation in France and the main feeder markets for France and Paris in particular were also analysed.

The subject Hotel was then positioned relative to its considered competitive market in order to determine the expected level of occupancy and average rate for the subject property. This data provided the fundamentals for the cash flow projections on which the valuation was based. Five separate valuation scenarios were provided as requested by the client, incorporating all three recognised approaches to valuation: income capitalisation; cost approach; sales comparison approach. In addition, in order to conform to the needs of the client, HVS have developed a new set of financial models specific to this client.

Client Flexibility

As a result of HVS's flexibility, entrepreneurialism, understanding and tailor made solutions to the needs of different clients, Aareal Bank retain HVS International for many of their Hotel related assignments.