Singapore’s CDL Buying Paris Hotel From Blackstone for $264M

Blackstone has turned to an old friend from Singapore to sell a Paris hotel which it had held for more than a decade, with City Developments Ltd having agreed to buy the Hilton Paris Opéra from Blackstone Real Estate Partners (BREP) Europe IV in a deal which values the asset at €244 million ($264 million), according to people privy to the transaction who spoke with Mingtiandi.

CDL, which typically invests in hospitality through its London-based Millennium & Copthorne Hotels division, is acquiring the 268-key hotel near the Gare Saint-Lazare just in time for the Paris Olympic Games this summer, with France among the few European markets to see an upswing in hotel investment transactions last year, according to data from MSCI.

With chairman and CEO Stephen Schwarzman’s crew now raising cash for Blackstone Real Estate Partners (BREP) Europe VII, the deal, which was first reported by London’s React News, comes nearly 11 years after Blackstone first acquired the hotel at 108 Rue Saint-Lazare.

The transaction marks CDL’s third major acquisition of a European real estate asset from a Blackstone fund in the past several years, with the Singaporean firm controlled by tycoon Kwek Leng Beng having last year picked up the St Katharine Docks complex in London from funds managed by the New York titan for £395 million (then $468.2 million).

Paris Hilton in Demand

Blackstone had acquired what was then the Concorde Opéra in Paris in 2013 for €153 million on behalf of its fourth European opportunistic real estate fund, which launched that same year.

The hotel underwent a $50-million renovation before reopening in 2015 as Hilton Paris Opéra. Should the hotel change hands at the reported price, the deal would value the property at the equivalent of €910,448 per room.

The transaction comes as data published by CoStar last month shows that hotels in Paris were already more than 50 percent booked for the Olympics this summer, with earlier reports having indicated that rates for the days around the games were more than 314 percent of normal levels.

With the games on the way and Paris’s appeal as a tourism destination having helped the city reclaim its visitors, trades of French hotels jumped 79 percent in 2023 from a year earlier to reach €2.39 billion. That number was up 11 percent from 2019 volume.

Emmanuel Blouin, a non-executive director with Paris-based firm Courbet SA, which manages investments in hotels and other real estate sectors in Europe, said that the reported price for the hotel is line with benchmarks for high end brands in the area where the Hilton Paris Opéra is located.

“Generally premium and luxury hotels (in Paris) have had strong operating performance, including ADR, occupancy and RevPAR, in spite of higher operating and financial costs over the last couple of years in Europe and specifically in Paris,” Blouin told Mingtiandi.

The hotel is within a short walk of Paris attractions including the Opéra Garnier, and is about a 10-minute train ride from the La Défense business district.

The Hilton Paris Opéra is also around one kilometre from one of CDL’s two existing hospitality assets in the city, the the 163-room M Social Hotel Paris at 12 Boulevard Haussmann. The Singapore firm’s other hotel in the city is the 239-key Millennium Hotel Paris Charles De Gaulle, north of Paris.

Blackstone will now be able to add the hotel sale to the $9 billion in investments which it had realised in BREP Europe IV by 31 December, and brings the fund manager a step closer to divesting the vehicle’s $11 billion in total investments, according to the company’s latest financial report.

A Blackstone representative declined to comment on the transaction, while CDL had not yet responded to inquiries from Mingtiandi by the time of publication.

Hunting for Hotels

The Paris deal comes after CDL acquired three overseas hotels last year, including picking up the 416-key Sofitel Brisbane Central from Canada’s Brookfield Asset Management in March for A$177.7 million (then $119 million). The company purchased a Seoul hotel for $110 million in July and added an Osaka property in August for $58 million.

CDL’s deal to purchase the Hilton Paris Opéra surfaced during the same week that Singapore investment manager Sun Venture announced that it had concluded its purchase of the 280-key Hyatt Place London City East hotel in central London for £100 million ($126.5 million), marking its debut in the hospitality sector.

In an earnings release this past week, CDL said its revenue climbed 50 percent in 2023 to reach an all-time high of S$4.9 billion ($3.6 billion), thanks in part to additional income generated by its overseas acquisitions, including the St Katharine Docks complex. That central London deal came around five years after CDL had acquired 125 Old Broad Street, formerly home to the city’s stock exchange, from Blackstone for £385 million (then $493.99 million).

Blackstone has added three UK residential projects to its portfolio in the past four months, including signing a deal in early February to buy a build-to-rent project in West London’s White City area.