NH Hotel Group successfully delivers on its asset rotation commitment, reiterates 2018 guidance for EBITDA growth and brings its deleveraging target forward

• NH Hotel Group has reached an agreement with German asset manager Deka Immobilien for the sale and lease back of the real estate property where the NH Collection Barbizon Palace hotel is located in Amsterdam
• The transaction, framed by NH Hotel Group’s asset rotation strategy, implies the sale of the real estate property for €155.5 million (€584.5k/room)
• Moreover, the sale of this real estate property enables the Group to top the guidance set in the 2017-2019 business plan and will generate an estimated gain for accounting purposes of €55 million in 2018, without any impact on the Group’s EBITDA objective that year
• With this deal, NH Hotel Group has taken advantage of the current liquidity window to reduce its exposure to real estate, while maintaining operation of the establishment under a sustainable variable-rent lease for 20 years, extendable to 60
• This long-term arrangement will benefit from 2017 from the complete refurbishment undertaken last year at the hotel which has 274 rooms (95% freehold), 1,000m2 of space for meetings and events and the prestigious Vermeer restaurant which boasts one Michelin star, not to mention the steady attraction and solid business performance of one of Europe’s most important tourist destinations

NH Hotel Group, a consolidated multinational operator reference in the European hotel segment, has entered into a binding agreement with the German asset manager Deka Immobilien for the sale and lease back of the real estate property where the NH Collection Barbizon Palace hotel is located, in the heart of Amsterdam close to its Central station.

The agreed transaction, which is expected to close by the end of January 2018, implies the sale of the real estate property for €155.5 million (equivalent to €584.5k/room) and will result in the recognition of an estimated accounting gain of €55 million in 2018, without affecting the Group’s EBITDA target for that year.

Thanks to the agreement, this hotel’s potential and the plans being executed by the Company, NH Hotel Group is in a position to reiterate its guidance for growth in 2018, specifically its target of delivering EBITDA of an estimated €260 million. In parallel, the Group will improve its financial position by bringing its leverage ratio within an estimated range of between 1.2x* and 2.1x by year-end 2018.

Under the scope of this transaction, the parties have negotiated a leaseback agreement with a variable rent with minimum guaranteed, which will enable NH Hotel Group to continue to operate the hotel on sustainable and profitable terms for an initial period of 20 years; the Company has the option of extending the lease for two additional 20-year periods. As a result, this deal balances NH Hotel Group’s ownership structure in the Netherlands, where it operates 36 hotels with 6,841 rooms, 56% of which will be operated under lease or management regimes following the transaction.

Ramón Aragonés, CEO of NH Hotel Group, said that the “successful close of this deal is the direct consequence of the privileged positioning of the properties owned by the Group, coupled with a smart and efficient asset rotation strategy designed to maximise the value of NH Hotel Group’s property portfolio”.

The hotel, whose 274 rooms (95% freehold) occupy a historic complex which dates to the seventeenth century, has 12 rooms spanning 1,000m2 for hosting events and meetings and also houses the Vermeer restaurant, with one Michelin star, which is run by the prestigious chef Chris Naylor. Following a complete refurbishment undertaken last year in order to bring the establishment within the Group’s upper-upscale brand NH Collection, there is substantial scope for lifting the hotel’s business volumes and profitability from 2017; indeed, this hotel’s EBITDA is expected to be 30% higher in 2018 than in 2015, which would imply a compound annual growth of its average rate of 9.1%.

*Assuming the conversion of the Bond in November 2018.

About NH Hotel Group

NH Hotel Group is a world-leading urban hotel operator and a consolidated multinational player. It operates close to 400 hotels and almost 60,000 rooms in 31 markets across Europe, the Americas and Africa, including top city destinations such as Amsterdam, Barcelona, Berlin, Bogota, Brussels, Buenos Aires, Düsseldorf, Frankfurt, London, Madrid, Mexico City, Milan, Munich, New York, Rome and Vienna.