Fattal sells, leases back two Munich hotels

David Fattal Photo; Eyal Izhar

The deal will generate cash flow of NIS 130 million for the Fattal group, which has reopened its hotels in Israel.

Fattal Properties (Europe) Ltd. announced today that it had signed sale and leaseback agreements on two hotels in Munich: Leonardo Hotel & Residence Munich and Leonardo Hotel Munich City West, for €77 million (NIS 305 million, of which NIS 16 million is earmarked for renovations).

In addition, Fattal's management company in Germany, Sunflower Management GmbH & Co. KG, has signed a lease agreement with the buyers whereby the two hotels, which contain 368 rooms, will be leased to it for 25 years for €2.52 million annually for Leonardo Hotel & Residence Munich and €0.93 million for Leonardo Hotel Munich City West. The company has, however, received a discount because of the coronavirus pandemic, and will pay just €1.78 million annually for the first 21 months.

Fattal Hotel Group CFO Shachar Aka said today, "The sale of the hotels will generate additional cash flow for us of NIS 130 million net, and it is part of our strategic plan to increase the group's liquidity, which so far has brought in NIS 1.5 billion. In this deal, we identified an opportunity for the sale of the hotels in a sale and leaseback deal on good terms and at a reduced rent of NIS 1.78 million annually for 21 months.

"At the same time, the group's hotels in Israel have reopened in accordance with the purple tag rules, and we are seeing high demand. We shall continue to operate in accordance with our strategic plan to increase cash flow and cut expenses until we return to normal activity."

The Fattal hotel chain, controlled by its founder, chairman and CEO David Fattal, has more than 42,000 rooms in 217 hotels (including hotels under construction) in nineteen countries.

Published by Globes, Israel business news - en.globes.co.il - on February 28, 2021

© Copyright of Globes Publisher Itonut (1983) Ltd. 2021

David Fattal Photo; Eyal Izhar
David Fattal Photo; Eyal Izhar
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