Natixis lends €200m on Paris’s largest hotel

Opportunistic investor Henderson Park has financed last month’s debut acquisition of Paris’s largest hotel with a €200 million loan from Natixis.

Henderson Park, led by former Mount Kellett co-founder Nick Weber, bought the city’s Le Méridien Etoile hotel for about €365 million for the new venture which launched in September.

Henderson Park was set up by Weber and US private equity firm Stone Point Capital, and is backed by cornerstone middle-eastern investors Kuwait Investment Authority and Wafra Investment Authority. It has an initial €500 million to invest and is focusing on debt and equity opportunities in gateway Western European cities.

The four-star Le Méridien Etoile has over 1,000 keys and was sold by Webber’s former firm, Mount Kellett Capital Management, and Cedar Capital.

Natixis’s senior loan implies a loan-to-value of approximately 55 percent. It  is the latest in a run of large hotel financings which the French bank has closed this year.

The bank, which usually syndicates its large loans, led the €450 million financing of nine hotels in east Germany, mainly in Berlin, Leipzig and Dresden, for French investor Fonciere des Murs and Event Hotels. That facility was distributed to a number of banks and investors including Deka Bank which took a €90 million participation.

In June, Natixis closed a €384 million pan-European financing for 85 hotels for Eurazeo and Accor Group.

Mount Kellett bought Le Méridien Etoile for about €280 million in 2014 with Cedar Capital which took a 5 percent stake. They put it on the market last February following losses in 2015 in Mount Kellett’s oil division.

In May that year, US hedge fund Fortress Investment Group made a $200 million investment into Mount Kellett and became co-manager of its funds.

The sale may be viewed by some as a coup, because the French hotel market has been suffering from weaker demand, because of terrorist attacks in the country. However, this is seen by longer-term investors as a short-term problem, and the latest ULI/PwC Emerging Trends Europe report shows that Paris remains high on their list of places to invest in good real estate.

Le Méridien Etoile is owned freehold, is situated opposite the Paris Convention Centre and recently underwent a renovation of its rooms, banqueting and conference facilities. It is managed by Starwood which is thought to have the contract for another two years.

On announcement of the acquistion last month, Weber said Le Méridien Etoile hotel had significant potential and “fits our approach to investments, being an extremely high quality property in a prime location within a top tier or gateway city, but which also offers the opportunity to asset manage further value.

‘We are firm believers in Paris’ strong underlying fundamentals as both a travel destination and an investment location, which, next to London, is one of only two truly global cities in Europe and remains one of the top three cities in the world in terms of tourist numbers.”

Eastdil Secured advised on the sale and on the debt financing.