AFK Sistema of Vladimir Yevtushenkov is preparing to put up for sale a pool of nine hotel facilities, a source close to the seller told Forbes. This is also known to one of the consultants working on the real estate market, and a partner of the company Colliers International Stanislav Bibik. "AFK Sistema is not against selling everything, but it certainly sells its regional assets that Andrei Yakunin bought from the Regional Hotel Network company," he explained to Forbes.
At the end of 2016, AFK Sistema closed the acquisition of eight hotels in Russia's regions (Volgograd, Astrakhan, Novosibirsk, Sochi, Izhevsk, Yaroslavl, Kazan, Voronezh) and the Moscow hotel from the Andrei Yakunin Venture Investment and Yield Management (VIYM) Marriott Courtyard Moscow Paveletskaya. Their total fund is 1379 numbers. Hotels are managed by international hotel operators: Park Inn by Radisson, Holiday Inn Express and Courtyard by Marriott.
In the company Cosmos Group, managing the hotel business of PJSC AFK Sistema, declined to comment. Under the management of the Cosmos Group there are more than 3800 rooms in 17 hotels in Russia, Czech Republic, Italy and Namibia. The press service of the company AFK Sistema reported that "specific decisions on the sale of hotel assets, as well as any other assets of the AFC, the corporation was not accepted."
In turn, Stanislav Bibik, familiar with the details of the deal, explained that the portfolio of nine hotels in the corporation was divided into two transactions. Capital hotel Marriott Courtyard Moscow Paveletskaya in AFK Sistema was allocated from the portfolio and will be sold separately.
The sale of the hotel pool is due to the fact that the company has changed the strategy for the development of the hotel business, according to Colliers International. Earlier, AFK Sistema was ready to develop a low-margin business strategically to reach a critical mass and find a western or eastern partner. "For the accumulation of such a pool of objects in the same hands and the granting of an opportunity for the entertainer to enter the market, she could receive an award," Bibik explained, noting that this was a long-term plan.
"Due to internal reasons, the long-term low margin strategy in the company was revised towards monetizing this portfolio," the brokerage company Colliers International said. In 2016, eight regional hotels and Marriott Courtyard Moscow Paveletskaya Sistema bought for 6.6 billion rubles, of which 4 billion rubles went to pay off the external debt of hotels.
"Today the price is about the same. Marriott Courtyard Moscow Paveletskaya is worth 1.7 billion rubles, and the pool of regional facilities is estimated at 5 billion rubles. That is, the entire portfolio is worth about $ 100 million, "Bibik said.
Another interlocutor Forbes believes that objects can be sold for less than $ 100 million. According to Colliers International, in case of a successful sale, the company can direct these funds to purchase other properties within the next year. "Previously, the company looked at assets whose payback was 15 years. Today these are objects whose payback is 5-6 years, "Stanislav Bibik said.
AFK Sistema President Mikhail Shamolin explained the purchase of hotels from the Yakunin pool with a growing demand for domestic tourism. According to analysts, such statements sounded relevant only against the background of the future World Cup in 2018. "Hotels can take off the cream from the championship and show good operations and loading. Due to the football championship, the economy and the overall picture of this portfolio will be better, "the representative of Colliers explained.
The company CBRE analyzed the readiness of Russian cities to host the 2018 FIFA World Cup. In particular, in Volgograd, where hotels for international brands have not been shown for a long time, today there are Hampton by Hilton, Park Inn by Radisson Volgograd and Hilton Garden Inn Volgograd. The World Championship will help attract additional tourist flow to the city, but it is important to remember that the event will last a month (plus the preparatory period), and in Volgograd there will be only 4 matches of the group stage, noted in CBRE. Investment fever did not affect the hotel market in Volgograd.
"The quality offer on the market has practically not increased, if you do not take into account the apartments of different levels and qualities. A large-scale sporting event will stimulate tariff growth in June and will allow hoteliers to increase their profitability indicators for the whole year, "CBRE Deputy Director Tatyana Belova commented.