Building tomorrow's hotel offer
Building tomorrow's hotel offerINITIATION COV.
With the arrival of Jean-François OTT, a seasoned European real estate professional, COURBET has made a new start in 2022. A portfolio in excess of €100m is targeted in France, particularly in the hotel sector. It will be built up in a phase of the cycle favourable to buyers, thus offering a controlled risk profile to the shareholder.
New start under the leadership of Mr. OTT
Since February 26, 2022, Mr. Jean-François OTT is the CEO of COURBET. Mr. OTT is a renowned real estate professional who has created, developed and accompanied the deployment of projects and assets in Europe over the last thirty years for several billion euros, particularly in the hotel sector but also in residential and office space. He is also active in the capital of several listed companies. As an investor and entrepreneur, Mr. OTT has demonstrated a real know-how in the detection of assets in the making whose value has since been multiplied by sometimes 5x or 20x (Prague, Berlin, Hvar, Austin) due to particularly low acquisition prices (€150-300 per sqm in Berlin or Prague in the 1990s for example). With a focus on derelict assets located in France, to be acquired per unit, Courbet will benefit from low acquisition prices.
Buy & Hold strategy
With the hotels in La Bourboule and Cannes in 2022, representing more than 200 rooms in operation at maturity, Courbet has begun the aggregation of assets that should take its portfolio beyond €100m in market value in the medium term
By investing significantly in the assets acquired to bring them up to standard, Courbet will bring them up to the best standards both in terms of attractiveness (supply/demand match) and in terms of operation (cost optimisation, carbon emissions, environmental standards, optimisation of both absolute and relative pricing vs. competing establishments).
Acceleration in the favourable phase of the cycle and valorisation
Higher interest rates coupled with ageing hotel owners (non-chains) plus the underinvestment of the Covid years will provide a favourable entry point for Courbet. Unlike those who have invested heavily in expensive properties over the past decade, Courbet is in a position to accumulate assets at a favourable stage of the cycle.
With the business model of full ownership, Courbet will have to pay little rent. This is a resilience factor (reduced risk for the investor) which has a favourable impact on long-term valuation (property value). In addition to the classic levers linked to the repayment of loans (capitalisation of value) and to rapidly profitable operations (controlled cost base), the portfolio effect is an opportunity to create additional value for the shareholder in the long term.
Its speed of deployment will place Courbet in the “growth” segment, which will distinguish it from the large real estate companies, which is why we are not applying a discount to NAV. Our price target anticipates a share of the future value creation vs. the last published NAV of the Company (€1.20 per share, June 2022). The development of the portfolio will require significant equity contributions vs. current market capitalisation of €8m. However, we do not expect significant dilution vs. NAV, which will protect minority shareholders. We initiate coverage of Courbet with a Hold recommendation.
Courbet SA. Courbet SA, formerly Societe Anonyme Courbet, is a France-based company engaged in investments in industrial and commercial undertakings and asset management.
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