22 June 2023

VALESCO COMPLETES CONTINENTAL EUROPE’S LARGEST OFFICE DEAL OF THE YEAR WITH €460 MILLION ACQUISITION OF ACCOR’S ICONIC GLOBAL HQ TOWER IN PARIS

• First acquisition by Valesco’s new fully discretionary fund, which had a recent first close anchored by sovereign capital
• Long-term 12-year lease in place with Accor – Europe’s largest hospitality group with c.€9 billion market cap
• Largest office deal of the year in Continental Europe and largest office deal in France since 2021 continues Valesco’s track record of landmark investments in European gateway cities

The Valesco Group (“Valesco”), the fast-growing London headquartered European real estate fund manager, has completed, via a sale and leaseback, the €460 million acquisition of Sequana Tower. The iconic tower in Paris serves as the global headquarters of Accor SA (“Accor”), the largest hospitality group in Europe and sixth largest globally. The acquisition represents the largest office deal of the year in Continental Europe and the largest office deal in France since 2021.

The transaction is the first by Valesco’s new fully discretionary fund, which had a recent first close anchored by sovereign capital. Executed against a highly volatile macroeconomic backdrop, it is the latest example of Valesco’s market-leading meticulous asset selection capability, proven structuring and financing skills, as well as deep market knowledge, enabling it to execute on landmark off-market investment opportunities. It continues Valesco’s rapid growth trajectory, having amassed a portfolio exceeding €2.5 billion in five
years, whilst delivering a returns profile more than double that of the peer group.

The 26-storey, 43,027 sqm tower, which was awarded the Eco Building Performance Grand Prize for its design, has strong ESG credentials, with a visitor and talent focussed experience at its centre. The generous amenities include a concierge service, a gym and spa, an auditorium, multiple cafeterias and breakout areas, an executive restaurant on the top floor as well as various terraces.

Sequana Tower is located in the Issy-les-Moulineaux commune, a prime micro-location in Paris and home to the headquarters of a number of multi-national companies including Nestle, Microsoft, Johnson & Johnson, Cisco and Capgemini.

The property is fully let to Accor (market cap c.€9 billion) on a 12-year term, without breaks and subject to annual indexation, and generates €22 million of contracted rent per annum. Whilst the pandemic has posed challenges to the hospitality industry, Accor has successfully navigated and grown through this period, whilst consistently exceeding targets. As Europe’s largest hotel operator, it has a highly diversified portfolio of 800,000 rooms, across 5,400 hotels, in 110 countries. Accor has been reporting strong financial and
operational performance metrics with revenues now greater than pre-pandemic and 2022 year-on-year EBITDA up 30x.

In line with its strategy of acquiring assets with meaningful value creation potential and its commitment to seeking to affect community impact through its investments, Valesco has identified a clear pathway to improve the building’s already strong sustainability credentials.

Shiraz Jiwa, Founder and CEO of The Valesco Group, commented: “Sequana Tower represents the latest addition to our growing portfolio of mission critical, futureproof landmark assets. In Accor, with whom we have a very strong working relationship, we have added a global hospitality behemoth with a highly differentiated offering led by exceptional management, to our tenant roster. The collective market cap of our occupiers now exceeds €4 trillion. Our deep experience of executing during complex times against a backdrop of macro uncertainty, combined with our conviction on the real estate fundamentals underpinning this Parisian HQ Tower, has enabled us to close this year’s largest Continental European office deal and France’s largest since 2021.

“Mission critical offices have a vital role to play in the performance of corporates and in the development of talent. Their essence is to create an ecosystem and environment where talent can thrive and self-actualise whilst delivering for the collective – there must be a return on experience in any future proof office along with sustainability at its core. With Sequana being the first investment by our new discretionary fund, we continue our drive to deploy into further differentiated product in Paris and other European gateway cities.”

Foucault de La Rochere, Chief Efficiency Officer of Accor SA, added: “We are delighted to have completed this transaction with a best-in-class partner like Valesco. This sale reflects both our ability to execute strategic initiatives on behalf of shareholders and the quality of our signature. Accor is proud to occupy the iconic Sequana Tower and we are confident that we will continue to build on our very strong partnership with Valesco in the coming years.”

Adam Sadiq, Board Member of The Valesco Group, added: “We are delighted with the landmark acquisition of the Accor global headquarters. It is a testament to the differentiated value proposition that Valesco delivers to institutional investors across the globe.”

Valesco was advised by Clifford Chance (legal), Lasaygues (notary), PwC (tax), Drees & Sommer (technical) and Elan (ESG).