SENSITIVE AND CONFIDENTIAL FILE
Super-prime 5 Star hospitality opportunity to acquire in Marrakech
This opportunity benefits from full planning permission and an agreed management contract with Kerzner International’s ‘One & Only’ operation (solely owned by the Investment Corporation of Dubai) which guarantees a ‘hell or high water’ minimum annual payment under the management agreement of EUR 6.5m pa.
The owner is a well-known and vastly experienced hotel developer.
He owns a super prime hotel and residential development site adjacent to two premium championship golf courses both offering privileged access from the hotel: (the 3 best golf courses in Morocco). The site is just 15 minute drive from Marrakech Menara International Airport. The hotel site is centrally located within easy reach of all the city’s most famous attractions:
* Close to the Medina and the city’s other major sights.
* Privileged access and adjacent to Marrakech’s premier golf clubs, Royal Golf and Golf Al Maaden.
* Peaceful and serene location with spectacular views of the Atlas Mountains.
* Part of the prestigious 224 hectare Al Maaden development.
* Site area is 14.5 hectares.
Highlights include:
* Palace 5 star hyper deluxe hotel & spa with 97 keys (and, if required, 47 serviced 3-4 bed villas).
* Full building permit approval obtained
* 50/50 Suites and Riads in the hotel
* The hotel will have 3 world class restaurants.
* Design and architecture Jean Michel-Willamette & Associates, Paris. Landscaping by Neveux-Rouyer, Paris.
* Senior debt in Morocco agreed at 50% LTV and interest rate of 4.5% pa
* GOP Y3 EUR +14M pa for hotel only
* Brand/operator One & Only
* Up to 20 year management contract
* One & Only will guarantee a minimum income of EUR 6.5m pa irrespective of the hotel’s GOP. Otherwise the owner takes 90% of GOP under the management contract (in addition, for first 10 years, EUR 6.5m pa is guaranteed as a minimum payment regardless of GOP for the hotel) projected to be EUR 12.5m pa by Y3
* One & Only will provide a 3 year guarantee capped at EUR 20m to support the EUR 6.5m annual guarantee and starts when the hotel is constructed and fitted out and One and Only commence operations.
* Based on Y3 projected GOP income under management agreement is EUR 12.5m pa (ie 90% of GOP) of which EUR 6.5m in guaranteed in all circumstances
* One & Only is ready to invest 20% cash equity (EUR 10M) or provide a guaranteed revenue for first 10 years (EUR 6.5m pa)
* Owner willing to invest 20% cash equity (EUR 10M)
* Alternatively, 100% available
* Planning start construction Jan 22-handover Jan 24
* 6 months for FF&E and pre-opening
As mentioned in the highlights above One & Only has agreed in principle to operate the hotel under a management agreement which includes a guaranteed minimum payment to the owner of EUR 6.5m pa. This guarantee will be supported with a 3 year bank guarantee capped at EUR 20m.
Alternatively, One & Only is prepared to invest 20% of anticipated equity (EUR 10m) assuming 50% debt gearing in the owning structure. The owner is also prepared to invest with One and Only in the latter financing structure. Alternatively a new investor may acquire 100% of the developed asset on a turn key basis based on the minimum guaranteed payment of EUR 6.5m pa.
Whilst 6.5m pa is guaranteed by year 3 the income under the management contract is projected to be circa EUR 12.5m pa (90% of GOP).
In addition to the super luxury 97 key 5 star hotel (divided 50:50 Riads and suites), forty-seven 3 and 4 bed villas will also be constructed which can be serviced and or integrated into the hotel project to reach and creating 288 keys or, alternatively, sold off.
Each residential villa and hotel Riad will have its own pool serviced by the hotel. The cost of building the 47 residential units is circa EUR 50m. Please note that in Morrocco new residential properties attract VAT at the rate of 20%. However, if these residential units are not sold but retained for letting as part of the hotel development then no VAT is chargeable. Similarly, if the villas are sold to owners provided that the owner commits not to spend more than 90 days per annum at the villa (the villa can be let by the hotel during to balance 275 days) then again no VAT is chargeable. This additional income will further materially enhance the projected income from the development to approximately
The projected unlevered IRR for the hotel is 15.7% delivering a multiple of 2.2x (assuming disposal after 5 years).
The projected levered IRR (assuming 50% gearing) for the hotel is 25.1% with a multiple of 3.1x.
The projected unlevered IRR for the residential is 18.8% delivering a multiple of 2.5x (assuming disposal after 5 years).
The projected levered IRR (assuming 50% gearing) for the hotel is 29.5% with a multiple of 3.8x.
The transaction can be structured as a forward purchase with completion on a ‘turn key’ basis once the hotel (and villa’s) have been constructed, fully fitted out and the hotel is operational secured by the management contract. The owner will finance the development cost from its own resources and facilities.
Naturally, if the hotel and residential are required with vacant possession, free of tie this, of course, is possible too
This opportunity benefits from full planning permission and an agreed management contract with Kerzner International’s ‘One & Only’ operation (solely owned by the Investment Corporation of Dubai) which guarantees a ‘hell or high water’ minimum annual payment under the management agreement of EUR 6.5m pa.
The owner is a well-known and vastly experienced hotel developer.
He owns a super prime hotel and residential development site adjacent to two premium championship golf courses both offering privileged access from the hotel: (the 3 best golf courses in Morocco). The site is just 15 minute drive from Marrakech Menara International Airport. The hotel site is centrally located within easy reach of all the city’s most famous attractions:
* Close to the Medina and the city’s other major sights.
* Privileged access and adjacent to Marrakech’s premier golf clubs, Royal Golf and Golf Al Maaden.
* Peaceful and serene location with spectacular views of the Atlas Mountains.
* Part of the prestigious 224 hectare Al Maaden development.
* Site area is 14.5 hectares.
Highlights include:
* Palace 5 star hyper deluxe hotel & spa with 97 keys (and, if required, 47 serviced 3-4 bed villas).
* Full building permit approval obtained
* 50/50 Suites and Riads in the hotel
* The hotel will have 3 world class restaurants.
* Design and architecture Jean Michel-Willamette & Associates, Paris. Landscaping by Neveux-Rouyer, Paris.
* Senior debt in Morocco agreed at 50% LTV and interest rate of 4.5% pa
* GOP Y3 EUR +14M pa for hotel only
* Brand/operator One & Only
* Up to 20 year management contract
* One & Only will guarantee a minimum income of EUR 6.5m pa irrespective of the hotel’s GOP. Otherwise the owner takes 90% of GOP under the management contract (in addition, for first 10 years, EUR 6.5m pa is guaranteed as a minimum payment regardless of GOP for the hotel) projected to be EUR 12.5m pa by Y3
* One & Only will provide a 3 year guarantee capped at EUR 20m to support the EUR 6.5m annual guarantee and starts when the hotel is constructed and fitted out and One and Only commence operations.
* Based on Y3 projected GOP income under management agreement is EUR 12.5m pa (ie 90% of GOP) of which EUR 6.5m in guaranteed in all circumstances
* One & Only is ready to invest 20% cash equity (EUR 10M) or provide a guaranteed revenue for first 10 years (EUR 6.5m pa)
* Owner willing to invest 20% cash equity (EUR 10M)
* Alternatively, 100% available
* Planning start construction Jan 22-handover Jan 24
* 6 months for FF&E and pre-opening
As mentioned in the highlights above One & Only has agreed in principle to operate the hotel under a management agreement which includes a guaranteed minimum payment to the owner of EUR 6.5m pa. This guarantee will be supported with a 3 year bank guarantee capped at EUR 20m.
Alternatively, One & Only is prepared to invest 20% of anticipated equity (EUR 10m) assuming 50% debt gearing in the owning structure. The owner is also prepared to invest with One and Only in the latter financing structure. Alternatively a new investor may acquire 100% of the developed asset on a turn key basis based on the minimum guaranteed payment of EUR 6.5m pa.
Whilst 6.5m pa is guaranteed by year 3 the income under the management contract is projected to be circa EUR 12.5m pa (90% of GOP).
In addition to the super luxury 97 key 5 star hotel (divided 50:50 Riads and suites), forty-seven 3 and 4 bed villas will also be constructed which can be serviced and or integrated into the hotel project to reach and creating 288 keys or, alternatively, sold off.
Each residential villa and hotel Riad will have its own pool serviced by the hotel. The cost of building the 47 residential units is circa EUR 50m. Please note that in Morrocco new residential properties attract VAT at the rate of 20%. However, if these residential units are not sold but retained for letting as part of the hotel development then no VAT is chargeable. Similarly, if the villas are sold to owners provided that the owner commits not to spend more than 90 days per annum at the villa (the villa can be let by the hotel during to balance 275 days) then again no VAT is chargeable. This additional income will further materially enhance the projected income from the development to approximately
The projected unlevered IRR for the hotel is 15.7% delivering a multiple of 2.2x (assuming disposal after 5 years).
The projected levered IRR (assuming 50% gearing) for the hotel is 25.1% with a multiple of 3.1x.
The projected unlevered IRR for the residential is 18.8% delivering a multiple of 2.5x (assuming disposal after 5 years).
The projected levered IRR (assuming 50% gearing) for the hotel is 29.5% with a multiple of 3.8x.
The transaction can be structured as a forward purchase with completion on a ‘turn key’ basis once the hotel (and villa’s) have been constructed, fully fitted out and the hotel is operational secured by the management contract. The owner will finance the development cost from its own resources and facilities.
Naturally, if the hotel and residential are required with vacant possession, free of tie this, of course, is possible too
Location
The site is located about 5 minutes from the centre of Marrakesh to the southeast, in the area with existing resorts including the Amanjena, the Palmeraie Golf Palace and next to the Mandarin Hotel. The site is easily accessible from both the centre of Marrakesh and the airport, by adequate 4-lane roads. Additionally the area features the three best golf courses of Marrakesh at the moment, including the Al Maaden, Amelkis, and Royal Golf Courses all in the immediate vicinity.
Masterplan
From above, the ambition of this prestigious development is clear.
But what a bird’s eye view does not show is how the Masterplan is designed to maximize sweeping views of the surrounding golf course and majestic Atlas Mountains.
Occupying 14.2 hectares, of which 7.4 hectares are dedicated to the Palace Hotel and 6.7 hectares to the residential development, the resort is without equal.
The residential development comprises 47 ultra-luxurious villas in a fully secured cluster with access to the facilities and services of the Palace Hotel.
The Palace itself consists of 41 riads with either one or two bedrooms and private pools. Each generously proportioned riad measures between 220m2 and 260m2, and 52 spacious suites range from 90-120m2. All enjoy a view of the Atlas Mountains. In total, the resort offers 93 keys and 97 bedrooms.
Serving as a vibrant hub, the Palace is an oasis of facilities including 3 restaurants – with the option to dine either in-doors or out – 2 bars, a Spa & Wellness centre, hair salon, library & business centre, swimming pool, and kid’s club.
But what a bird’s eye view does not show is how the Masterplan is designed to maximize sweeping views of the surrounding golf course and majestic Atlas Mountains.
Occupying 14.2 hectares, of which 7.4 hectares are dedicated to the Palace Hotel and 6.7 hectares to the residential development, the resort is without equal.
The residential development comprises 47 ultra-luxurious villas in a fully secured cluster with access to the facilities and services of the Palace Hotel.
The Palace itself consists of 41 riads with either one or two bedrooms and private pools. Each generously proportioned riad measures between 220m2 and 260m2, and 52 spacious suites range from 90-120m2. All enjoy a view of the Atlas Mountains. In total, the resort offers 93 keys and 97 bedrooms.
Serving as a vibrant hub, the Palace is an oasis of facilities including 3 restaurants – with the option to dine either in-doors or out – 2 bars, a Spa & Wellness centre, hair salon, library & business centre, swimming pool, and kid’s club.
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Summary Investment document listed below would be provided, if the opportunity could be of interest upon LOI and NDA:
1. Financial Assumptions and Projections – Hotel
2. Financial Assumptions and Projections – Residential
1. Financial Assumptions and Projections – Hotel
2. Financial Assumptions and Projections – Residential