New CDC investment to support rise of affordable business hotels across Africa
EUR46m commitment to Pan-African 3-Star group, ONOMO Hotels
A new investment to boost affordable business hotel infrastructure across Africa has been announced today by CDC, the UK’s development finance institution.
CDC is investing EUR46 million in ONOMO Hotels, a 3-star hotel group targeting African business travellers crossing the continent. The new investment will boost foreign exchange revenue, support the growth of a thousand jobs across the region, and build the hotel infrastructure to make business easier in some of Africa’s challenging regions.
Established in 2009, ONOMO Hotels is a Casablanca-headquartered company that designs, develops, owns and manages hotels. The company currently operates seven hotels, including six it owns (Dakar, Abidjan, Lomé, Bamako, Cape Town and Sandton) and one that it manages (Libreville). It has three new openings scheduled by early 2018 in Conakry, Kigali and Durban.
CDC’s investment is part of a fundraising of EUR106 million alongside Batipart, the current owner of ONOMO, a family office with a 30-year long track record in real estate investments and operating platforms, and CIC Capital, the international private equity investment arm of Credit Mutuel CM11 Group, a leading French banking and insurance group.
Many African countries have a relatively small number of branded quality hotels and the industry has recorded very high occupancy rates indicating a need to increase the supply of affordable, quality hotel accommodation.
ONOMO will use the capital to finance the development of its pipeline across Africa to build a portfolio of more than 20 hotels over the next 5 years. This will treble the number of beds from the current level of around 1400.
Welcoming the investment, CDC Managing Director, Mark Pay said:
“Our investment in ONOMO Hotels will stimulate regional business travel and support the growth of jobs and local supply chains across Africa. As the continent sees growing levels of business activity it will need more affordable, mid-market business hotels to unlock its full economic potential.”
“CDC’s ability to make long-term investments means that it is able to support ONOMO’s focus on greenfield development, ownership and management of hotels, that typically requires a longer holding period than many traditional investors would consider.”
Cedric Guilleminot, CEO of ONOMO Hotels added:
“We are excited to partner with CDC which strengthens our ambition to become a Pan-African leader and achieve a fast-paced roll-out of the ONOMO brand. CDC’s investment will have a positive impact in terms of job creation and promoting sustainable, affordable and environmentally friendly hotels in synch with ONOMO’s core values.”
ONOMO is expanding into Southern and East Africa and will use CDC’s long history in those regions to help the company establish a strong presence.
CDC will also help ONOMO adopt green building design and construction principles to implement energy and water-efficiency measures. This is an area in which CDC has considerable experience having supported a hotel investment in Ghana to become the first project in Africa to receive the EDGE certification, an award that aims to help buildings save energy and water while reducing greenhouse gas emissions.
CDC Group plc is the UK’s development finance institution. Wholly owned by the UK Government, it invests in sub-Saharan Africa and South Asia with the aim of supporting economic development to create jobs. CDC takes a flexible approach and provides capital in all its forms, including equity, debt, mezzanine and guarantees, to meet businesses’ needs and achieve development impact. CDC has net assets of £4.8bn.