FibraHotel’s $161 Million Acquisition of the Fiesta Americana Condesa Cancun all-inclusive resort hotel

Nader, Hayaux & Goebel and Pontones & Ledesma advised on the deal

FibraHotel (BMV: FIHO12), the first real estate investment trust specialized in hotels in Mexico announces an agreement to acquire the Fiesta Americana Condesa Cancun resort hotel for a purchase price of Ps. 2,892 million in a sale and leaseback transaction with Grupo Posadas. FibraHotel and Grupo Posadas have signed a binding agreement subject to certain conditions including: (i) the approval of Grupo Posadas´ and FibraHotel´s shareholders, (ii) FibraHotel´s successful CBFI placement and, (iii) COFECE1 Authorization. The transaction is expected to close at the beginning of 2018. Additionally FibraHotel and Grupo Posadas have committed to invest about Ps. 60 million each to renovate public areas without closing the hotel during 2017 and 2018. Together with the recent room renovation, this will represent an investment of over Ps. 400 million in the hotel in the past few years.

To fund this investment as well as other projects including its property pipeline and other general corporate purposes, FibraHotel called a CBFI holders assembly to take place on September 1st 2017. The items in the agenda will focus on, among other things, the approval of: (i) an equity shelf program of up to Ps. 10,000 million, of which, (ii) Ps. 4,000 million plus an overallotment option will be the first issuance of the equity program, and (iii) the acquisition of the Fiesta Americana Condesa Cancun hotel.

Fiesta Americana Condesa Cancun hotel has 507 full-service rooms that were recently renovated. The hotel will be operated by Grupo Posadas and FibraHotel will sign a long-term lease agreement with fixed and variable rent components. The Fiesta Americana Condesa Cancun is an iconic all-inclusive five star resort hotel in a prime location with over 200m of beach front in a land plot of over 40,000m2 in the zona hotelera region of Cancun in Mexico. The hotel has 507 rooms and 15 consumption centers, including five specialty restaurants, five bars, spa, over 1,100 m2 of meeting and event space, a kid’s club and other amenities. This resort mainly generates U.S. dollar-denominated revenues and operates under the all-inclusive model; where guests pay a single flat rate for a package that includes food and beverage in addition to lodging. Fiesta Americana Condesa Cancun recently underwent a ~Ps 300 million renovation by Grupo Posadas.

Cancun is the largest hotel market and the most established leisure market in Mexico with over 68,000 hotel rooms2 in 2016 (~70% all-inclusive2). A total of over 10 million passengers arrived in Cancun´s airport in 2016 of which over seven million were international, surpassing Mexico City´s international arrivals. Cancun has a broad and established tourism infrastructure and an average occupancy rate of over 77%2 in 2016.

The acquisition of this all-inclusive five star resort hotel will represent FibraHotel’s first property in the large resort segment, which we believe could open an important new channel for growth for the Company in the future. Accessing the large resort segment could provide FibraHotel with the opportunity to increase its proportion of U.S. dollar-denominated revenues and add diversification to its portfolio with a vision of becoming Mexico´s leading hotel owner across all segments.

FibraHotel’s portfolio, including Fiesta Americana Condesa Cancun hotel, will consist of 87 hotels with 12,726 rooms, of which 80 hotels are in operation (11,487 rooms) and seven hotels are in different development stages.

Nader, Hayaux & Goebel advised FIBRAHotel with Vanessa Franyutti Johnstone (Picture), Alejandro Rojas Vera, Jenny Ferron C., Nicolás Díaz Campos, Eduardo Bravo Sánchez, Law Clerk, Ana Valdes M. and María Martínez Escobar.

Pontones & Ledesma advised Grupo Posadas and FIBRAHotel with Arturo Ledesma (Environmental).

Involved fees earner: Arturo Ledesma – Pontones & Ledesma; Vanessa Franyutti Johnstone – Nader, Hayaux & Goebel; Alejandro Rojas Vera – Nader, Hayaux & Goebel; Jenny Ferron – Nader, Hayaux & Goebel;

Law Firms: Pontones & Ledesma; Nader, Hayaux & Goebel;

Clients: Grupo Posadas, S.A.B. de C.V.; FibraHotel;

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Author: Ambrogio Visconti.