Iris Capital Picks Up Accor Portfolio for $180m


Sam Arnaout’s Iris Capital has purchased iProsperity’s distressed portfolio of 17 Ibis hotels from AccorInvest for $180 million.

The budget hotels were originally part of a 3,000 room portfolio was set to be sold to Michael Gu’s iProsperity Group, which has been actively growing its hotel business, before the company collapsed.

The portfolio was originally listed in mid-2018 by the real estate investment and development arm of the French hotel giant featuring 23 assets, signalling to investors that Australian hotel values had peaked.

Hong Kong-backed iProsperity was quick to put pen to paper on a deal worth more than $220 million late last year in order to bolster its portfolio of commercial assets.

iProsperity founder Michael Gu has since fled the country in August owing investors $60 million.

The investment firm was placed into voluntary administration in July.

AccorInvest acquired fifteen of the Ibis-branded hotels from the Abu Dhabi Investment Authority for $200 million in December 2016.
▲ AccorInvest acquired fifteen of the Ibis-branded hotels from the Abu Dhabi Investment Authority for $200 million in December 2016.

The deal struck by Sydney-based Iris Capital is for 17 Accor operated hotels features 1,800 rooms nationally.

The operating agreements with Accor will remain unchanged, sources indicate.

The portfolio comprises 12 hotels in NSW, including the 200-room Ibis Sydney Airport and the Ibis Budget Sydney Olympic Park and some regional hotels.

In Victoria, there are three hotels including the 230-room Ibis Melbourne Hotel and Apartments near Queen Victoria Market in the Melbourne CBD and one each in Canberra and Brisbane.

JLL hotels and hospitality group’s Craig Collins and Peter Harper steered the deal.

“The pure scale of the portfolio and its diversity—in terms of location, market positioning and income profile—attracted significant interest from a very broad range of capital sources,” Collins said.

The AccorInvest portfolio will add to Iris Capital’s growing portfolio of hospitality assets, including in Sydney the Hotel Steyne in Manly and the Bourbon and Empire hotels in Potts Point. The company now boasts a portfolio to 45 properties.

“This purchase fits in well with our current hospitality pub portfolio, takes our count to 45 hotels and delivers on the group’s strategy for diversification,” Iris Capital chief executive Sam Arnaout said,

The group is also undertaking a large mixed-use project in central Newcastle, where it has plans for a new QT Hotel operated by ASX-listed Event.

The $700 million development will place the hotel in the 111-year-old former David Jones building on Hunter Mall in Newcastle’s East End.

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