What's Happening?
Covivio, a French real estate investor, has acquired a portfolio of four 4-star hotels in Milan, Italy, from Invest Hospitality through a sale and leaseback transaction valued at €217 million. The hotels, located in key areas such as Scalo Farini and Bicocca,
have recently undergone renovations. The transaction includes 21-year leases with a guaranteed minimum rent and a revenue-linked variable component, potentially increasing the yield to about 7%.
Why It's Important?
This acquisition by Covivio highlights the growing interest in the European hospitality market, particularly in prime locations like Milan. The transaction reflects a strategic move to capitalize on the city's tourism and business travel demand. By securing long-term leases with variable rent components, Covivio aims to ensure stable income while benefiting from potential increases in hotel revenue. This deal could influence other investors to explore similar opportunities in the hospitality sector.
