Duet Private Equity is teaming up with global construction firm Bouygues Batiment International and establishing Duet Africa Hotels. The vertically-integrated firm will invest in, develop and sell business hotels in fast-growing and resource-rich companies across sub-Saharan Africa. The venture will focus on greenfield developments or significant refurbishments in standalone or mixed-use properties.
The deal allows Duet and Bouygues to tap into the expected expansion in demand for accommodation as business travel increases in a region that is growing in excess of 5% a year. The firm estimates that there are currently only 84,000 branded business hotel rooms in Africa, with the majority being found in North African and South Africa. Long development lead times and construction challenges only serve to widen the expected supply and demand imbalance. Some 62% of the hotel rooms projected to be delivered in 2015 are still not on-site
Henry Gabay, Duet Group’s CEO commented “One of the biggest challenges to the hotel sector in Africa is the ability to build on time and budget. Working with Bouygues Batiment International is the perfect solution to these challenges.” Duet Africa Hotels will be led by Jean-Marc Grosfort, the former Chief Development Officer, Middle East and Africa for Marriot International.
Private Equity International reports that Duet has simultaneously launched a dedicated fund for the venture which is aiming to raise $200 million before the end of the year. Both Duet and Bouygues will commit capital to the fund which is expected to deliver a 20% IRR.