US-based WP Carey acquires Mauritius Resort Hotel La Plantation for USD 72 mn
For the valuation of the property for the purpose of this acquisition, four factors have been taken into account notably: the fact that it is an upscale escort property, it is well-located, counts as a stable international investment and is providing returns under a triple-net, inflation-protected euro lease. (Image: Ilgiramondo)
CPA: 18 Global, one of the managed non-traded Real Estate Investment Trusts (REIT) of US-based WP Carey Inc, has acquired the upscale 266-room resort hotel, La Plantation d’Albion Club Med, located in Albion, Mauritius, for USD 72 Million (MUR 2.3 billion).
Carey’s CPA: 18 is a global net-lease REIT specializing in corporate sale-leaseback, build-to-suit construction financing and the acquisition of single-tenant net-lease properties.
The acquisition has been triple net-leased to Holiday Village Management Services LTD, a subsidiary of Club Mediterranee SA, for 15 years to begin with. Club Med, the renowned pioneer of all-inclusive resorts, is guaranteeing the lease.
For the valuation of the property for the purpose of this acquisition, four factors have been taken into account notably: the fact that it is an upscale escort property, it is well-located, counts as a stable international investment and is providing returns under a triple-net, inflation-protected euro lease.
La Plantation D’Albion is located on the West Coast of Mauritius with an extensive beach frontage and stunning views along the resort strip. The property is well situated and is approximately 2000 kilometres off the African continent.
With its 53.4 acres of natural tropical woodland, the resort is developed over a substantial land area of approximately 22 hectares, of which 10 hectares are free hold and 12 hectares are rented out from the Government of Mauritius.
The resort is operated and let out to Holiday Village Management Services Ltd, which is also a 100% subsidiary of Club Méditerranée S.A.
However, Club Med’s start up market strategy is based on the growing focus of the Asian tourism market. Club Med 5 Trident resorts have shown stability in terms of performance in only one of its two resorts since its development in 2007, despite a wider global economic difficulties.
As it is, market focus and price point have showed solid generation in terms of return to the resort. Moreover, Mauritius positioning itself 20th according in the World Bank’s “Ease of Doing Business Index’’, puts and elevates the conductive regulatory of the island in starting and operating business.
Subsequently, the triple-net inflation facilitates the lease for a period of 15 years with rent will be paid in Euros with the annual increase tied to the European Consumer Price Index.
Club Med that is guaranteeing the lease, is a leader in the upscale, all-inclusive resort space and it owns, leases and manages 66 resorts and 1 cruise ship, with around 46,000 beds and related facilities.
According to WP Carey’s Managing Director and Co-Head of Global Acquisitions, Jason Fox, the acquisition enables the CPA: 18 to access an “upscale beach resort in a leading tourism destination. The deal demonstrates our ability to access a wider pool of global investment opportunities that meet our established investment criteria in order to provide long-term value for CPA®:18 – Global’s investors”.
As for Roger Hensman, Advisor to WP Carey, he declared that WP Carey’s investing perspective and experience enabled them to recognise the value of this acquisition as an attractive addition to the CPA: 18- Global portfolio.
“Given the quality of the asset and the strength of Club Med as an established resort owner and operator in combination with the triple net-lease structure, the opportunity was consistent with their established investing criteria,” he concluded.