Novotel's value increases 50% one year after acquisition

Novotel, the four-star hotel located on Bucharest’s Calea Victoriei, has recently been valued at 44.7 million euros, up 50% on the acquisition price paid by Austrian investment fund Sparkassen Immobilien at the end of 2006, according to a company report. Sparkassen Immobilien, the real estate investment division of the Erste group, purchased Novotel from Accor for 29.5 million euros. French-based Accor sold the Novotel hotel three months after it opened, after which it signed a long-term lease contract with Sparkassen. The current valuation considers an annual yield of 5.5% in euros, which means that a potential buyer could derive an annual profit worth 2.5 million euros. Company representatives did not provide any information on Novotel’s profit and turnover in its first full year of operations. Last year saw the sale of another four-star hotel on Calea Victoriei, Golden Tulip Sky Gate, which has 83 rooms, and was acquired by Atlas Estates International. The company paid 12 million euros to BNB Victoria Tower (a sum that includes debts), which brings the value of a Golden Tulip Sky Gate room to around 144,000 euros, 20% less than the value of a room at Novotel (172,000 euros).