FibraHotel (BMV: FIHO12 announced an agreement to acquire the Fiesta Americana Condesa Cancun resort hotel for a purchase price of Ps. 2,892 million in a sale and leaseback transaction with Grupo Posadas.
FibraHotel and Grupo Posadas have signed a binding agreement subject to certain conditions including: (i) the approval of Grupo Posadas´ and FibraHotel´s shareholders, (ii) FibraHotel´s successful CBFI placement and, (iii) COFECE1 Authorization. The transaction is expected to close at the beginning of 2018. Additionally FibraHotel and Grupo Posadas have committed to invest about Ps. 60 million each to renovate public areas without closing the hotel during 2017 and 2018. Together with the recent room renovation, this will represent an investment of over Ps. 400 million in the hotel in the past few years.
To fund this investment as well as other projects including its property pipeline and other general corporate purposes, FibraHotel called a CBFI holders assembly to take place on September 1st 2017. The items in the agenda will focus on, among other things, the approval of: (i) an equity shelf program of up to Ps. 10,000 million, of which, (ii) Ps. 4,000 million plus an overallotment option will be the first issuance of the equity program, and (iii) the acquisition of the Fiesta Americana Condesa Cancun hotel.
Fiesta Americana Condesa Cancun hotel has 507 full-service rooms that were recently renovated. The hotel will be operated by Grupo Posadas and FibraHotel will sign a long-term lease agreement with fixed and variable rent components. The Fiesta Americana Condesa Cancun is an iconic all-inclusive five star resort hotel in a prime location with over 200m of beach front in a land plot of over 40,000m2 in the zona hotelera region of Cancun in Mexico. The hotel has 507 rooms and 15 consumption centers, including five specialty restaurants, five bars, spa, over 1,100 m2 of meeting and event space, a kid's club and other amenities. This resort mainly generates U.S. dollar-denominated revenues and operates under the all-inclusive model; where guests pay a single flat rate for a package that includes food and beverage in addition to lodging. Fiesta Americana Condesa Cancun recently underwent a ~Ps 300 million renovation by Grupo Posadas.
Cancun is the largest hotel market and the most established leisure market in Mexico with over 68,000 hotel rooms2 in 2016 (~70% all-inclusive2). A total of over 10 million passengers arrived in Cancun´s airport in 2016 of which over seven million were international, surpassing Mexico City´s international arrivals. Cancun has a broad and established tourism infrastructure and an average occupancy rate of over 77%2 in 2016.
The acquisition of this all-inclusive five star resort hotel will represent FibraHotel's first property in the large resort segment, which we believe could open an important new channel for growth for the Company in the future. Accessing the large resort segment could provide FibraHotel with the opportunity to increase its proportion of U.S. dollar-denominated revenues and add diversification to its portfolio with a vision of becoming Mexico´s leading hotel owner across all segments.
FibraHotel's portfolio, including Fiesta Americana Condesa Cancun hotel, will consist of 87 hotels with 12,726 rooms, of which 80 hotels are in operation (11,487 rooms) and seven hotels are in different development stages.
FibraHotel is a Mexican trust created primarily to acquire, develop and operate hotels in the limited service, selected service, full service, resort and extended-stay segments. Our objective is to provide attractive returns to our CBFI holders, through stable cash distributions and the appreciation of our real estate assets. Also, we will aim to have a high quality hotel portfolio, through the affiliation to different hotel brands and renowned operators, as well as geographic and segment diversification.
Under Mexican laws, Fibras must invest at least 70% of its assets in real estate for lease, among other requisites. Additionally, Fibras must distribute in cash at least once a year 95% of taxable income to its CBFI holders. Such characteristics, together with a solid performance of the real estate market in Mexico and a team with over two decades of real estate and hotel experience, make FibraHotel an attractive investment vehicle.
FibraHotel is internally managed by Fibra Hotelera, S.C., and is externally advised by Administradora Fibra Hotelera Mexicana, S.A. de C.V whose key executives have extensive experience in the development and operations of commercial real estate and hotels in Mexico.
1 COFECE (Comision Federal de Competencia Economica) is the Mexican Anti-trust commission charged with supervising, promoting, and guaranteeing free access and competition in the markets, for the benefit of consumers and economic growth in Mexico
2 Data estimated based on Sectur, HVS, and airport estimates
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