EPH announced a principal agreement to acquire two premium hotel developments at lakeside locations in Bavaria, marking the company's planned entry into the German market. The step represents a logical geographic expansion of the pipeline beyond Austria and underlines the company's ambition to scale its development platform selectively in attractive leisure destinations.
The first project is planned as a modern design hotel on a c. 7,000 sqm lakefront site with around 220 beds. The concept targets a lifestyle-oriented guest segment and is intended to combine contemporary architecture with a strong experiential component. The second development is envisaged as a boutique design hotel on a c. 4,500 sqm plot in an elevated location with panoramic lake views. Here, the positioning is expected to focus on a more exclusive clientele seeking individuality and premium micro-locations. For both projects, EPH aims to secure an international operator, which would represent an important de-risking step and a prerequisite for long-term value crystallisation.
The purchase price is stated in the low double-digit €m (eNuW: € 15m) range. Of this, € 2.5m is planned to be settled via an EPH share package under the company's Land-for-Equity approach. This structure allows EPH to preserve liquidity at holding level while aligning interests with the seller. At the same time, it highlights the continued application of the company's capital-light development model, which is based on sourcing attractive land positions, enhancing them through concept development and operator agreements, and subsequently realising value through structured exits.
Importantly, the acquisitions have not yet been closed and remain subject to final agreements and further development steps. Hence, we do not incorporate the projects into our forecasts at this stage, leaving our estimates unchanged. Nevertheless, the announcement signals continued pipeline momentum and demonstrates that EPH is actively working on broadening its regional footprint and project base.
Beyond operational execution, management aims to conduct a larger equity raise in order to broaden the free float, strengthen the balance sheet and create additional financial flexibility for further pipeline expansion alongside the existing bond structure. Moreover, EPH recently announced a future dividend policy, aiming to for a payout ratio of 30% once the company is generating profits.
Overall, the news fits well with the strategic framework. While execution risks and timing aspects remain to be monitored until closing and operator contracts are secured, the planned German expansion appears consistent with EPH's development approach.
We reiterate our BUY rating with an unchanged PT of € 102 based on DCF.
ISIN: AT0000A34DM3
