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PARIS-GE Real Estate Europe has joined in a $427 (275 euro) million hotel property fund, bringing three local properties to the table in exchange for shares and cash. The partnership also includes BNP Paribas Assurance, a founding member of the Capital France Hotel Fund, which is managed by another partner, Algonquin Asset Management France. The venture’s growth plans are to acquire $1.5 billion (one billion euro) in hotel assets across Scandinavia and Central and Eastern Europe by 2011.

Remy Gancel, managing director and head of new business for the GE division, tells GlobeSt.com that France has a favorable balance between supply and demand. “The fund’s strike zone, the mid and upscale segment, covers the bulk of the European market, avoiding niche sectors, such as the budget and upper-scale segments,” he says. “(These) segments are a good trade-off for GE as they are a good compromise between the budget segment, which is the most operationally driven, and the luxury segment, the most volatile segment.” He says the venture hopes to open the fund to other third-party investors once it reaches its $1.5 billion goal.

The fund has owned and managed nine hotels in French urban locations, operated under Radisson and Park Inn brands, including the Radisson Nice, the Raddison Lyon and the Park Inn Nancy, since 2007. GE has now brought in two hotels in Paris operated by Accor under the Mercure brand, and one hotel in Cap d’Ail operated under the Marriott brand. The combined properties total about 2,140 rooms.

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