Sale of the Hotel Windsor

Starting point

In February 2016, the Groupe Tagerim, owners of a chain of hotels called 9hotels collection, were looking into purchasing a hotel „business and premises" in Geneva to operate the establishment according to the standards of their brand.SPG Intercity Geneva SA had to find a selection of opportunities corresponding to the various criteria defined at the beginning of the mission in order to be able to conclude the transaction by the end of 2016, while managing aspects related to the LDTR, LFAIE laws and lease rights, and select a property allowing to start a complete technical Due Diligence.

SPG Intercity contacted all the owners of the buildings fitting the said criteria, approximately 40 establishments, in order to get their position on an eventual sale of their building, 5 owners were willing to enter into discussion.

SPG Intercity produced a comparative shortlist to classify these five establishments according to 9Hotels Collection‘s criteria and needs. On this basis Hotel Windsor located on rue de Berne-rue de Neuchâtel on the right bank, fit the criteria, especially being only 300 meters from the train station and the lake. Its potential for imporvement (average price, yield, occupancy rate, satisfaction and ratings) and the owner‘s financial expectations (overall price, by key, per bed, per sqm).

These criterias made it an attractive acquisition opportunity in view of SPG Intercity‘s expertise in intrinsic value of the building and comparable transactions in the area.

The solution

Once the recommended transaction price was accepted by the parties, an exclusive 60 day trading period was granted in order to proceed with the legal assembly, creation and validation of the business plan and the search for financing. During this period, SPG Intercity advised the buyer with the implementation of a transitional management contract pending renovation work. a conseillé l’acquéreur dans la mise en place de sa stratégie de structuration, la recherche de financement bancaire, la mise en place d’un management contract de transition en attendant les travaux de rénovations.

Since the establishment had been operating for more than 6 years without a permit to occupy, a neutral fire safety expert report was carried out in order to limit the liability of the purchaser. An asbestos and pcb expertise before work was carried out for a future authorisation. In addition, since the buyer did not have a license to operate within the LRDBH, SPG Intercity put the buyer in contact with a company capable of providing a transitional management service with this license, allowing extra time for the buyer to complete his work and then taking on a director having this license before re-opening.

The result

The sales deed was signed August 30th and transfer of owenership September 30, 2016.