Covivio Hotels - 2025 Half-year financial report

FINANCIAL INFORMATION  HALF-YEAR 2025

CONTENT

1.  ACTIVITY REPORT AS OF 30 JUNE 2025     3

1.1.  Financial results     8

1.2.  Assets as of 30 June 2025 11

1.3.  EPRA indicators     15

1.4.  Related companies             15

1.5.  Risks and uncertainties       15

1.6.  Outlook for 2025     18

1.7.  Transition tables     19

2.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS AT 30 JUNE 2025     22

3.  STATUTORY AUDITORS' REPORT   75

4.  CERTIFICATION BY THE PERSON RESPONSIBLE 78

1. ACTIVITY REPORT AS OF 30 JUNE 2025  

Hotel market: performance still improving in Europe 

After very good momentum in 2024, the European hotel industry continued its growth in 2025 with results up +2.5% at the end of May 2025. These results were driven by the increase in prices and a slight increase in occupancy rates. 

The best results were recorded in Southern Europe, notably Spain and Italy, with increases in RevPAR (Revenue Per Available Room) of +5.0% and +3.6% respectively. Germany continued to catch up, posting a +4.1% increase in RevPAR. In France, RevPAR growth was +2.1%. 

Hotel investment in Europe totalled €4.95 billion in the first quarter of 2025 (stable year-on-year), with the hotel sector now accounting for 10.7% of total real estate investments. 

€60 million in disposals, in line with 2024 appraisal values  

Covivio Hotels signed new disposal agreements totalling €60 million in Group share (€65 million at 100%) during the first half of 2025: 8 assets in France for €23 million, including 2 Accor brand hotels, and 1 hotel in Erfurt, in Germany (€37 million).  

Increase in appraisal values of +2.3% on a like-for-like basis, due to the increase in revenues and the consolidation of hotels as operating properties performed at the end of 2024

Covivio Hotels held a Hotel real estate portfolio valued at €5,878 million (€6,501 million at 100%) at the end of June 2025, characterized by: 

-       high-quality locations: the average grade given for “geographic location” by customers on Booking.com is 8.9/10;  

-       a diversified portfolio, in terms of countries (11 countries), segments (27% of economy hotels, 40% of mid-range hotels and 33% of upscale hotels) and partner operators (17 brands including Accor, Marriott, IHG, Radisson, Minor and B&B);

-       long-term leases of 10.7 years on average.

On a like-for-like basis, the Hotel real estate portfolio was up by +2.3% over six months, driven mainly by assets located in France (+4.7%) and southern Europe (+3.3% in Spain, +2.6% in Italy). This growth is mainly due to the consolidation of hotel properties located in France and Belgium at the end of 2024, which resulted in a revaluation of these assets of +10.4%.

The hotel portfolio has an average yield excluding transfer taxes of 6.4% (stable over 6 months), of which

6.2% on the lease portfolio and 6.5% on the operating properties portfolio. 

Breakdown of the hotel real estate portfolio at 30/06/2025 (in Group share)

€183 million increase in equity  

Covivio Hotels’ equity increased by €183 million in the first half of 2025, following the payment of the dividend in shares, which was subscribed by 82.3% of shareholders, at an issue price of €18.57/share.

9,848,860 new shares were issued, increasing the total number of shares comprising the share capital to 157,990,312.

This transaction, which reflects the renewed confidence of shareholders in Covivio Hotels’ strategy, strengthens the Company’s resources to continue its development.  

Decrease in debt and improvement in the debt ratio 

The net debt of Covivio Hotels fell to €1,966 million in Group share compared to €2,119 million at 31 December 2024, with a stable rate, of 2.3% at the end of June. The average debt maturity is 4.4 years. 

On June 30^th, 2025, the Loan To Value (LTV) ratio stood at 29.8%, down -2.7 points compared to the end of 2024, benefiting from increases in value and the payment of the dividend in shares. The interest coverage ratio (ICR) was 8.1x, and the net debt/EBITDA ratio was 6.4x.

Covivio Hotels net liquidity (including undrawn credit lines) was €958 million at the end of June 2025.

Revenue growth: +5.3% on a like-for-like basis 

The good results in the hotel market and for our hotels over the year resulted in revenue growth of +6.0% on a current scope and +5.3% on a like-for-like basis to €162.9 million compared to €153.7 million on 30

June 2024.          

      (*) On a like for like basis

Fixed revenues (56% of hotel real estate revenues; Group share)

- Rents totalled €91.5 million on 30 June 2025, i.e. a +3.6% increase on a like-for-like scope due to rent indexation.   

Variable revenues (44% of hotel real estate revenues, Group share)

-       Hotel real estate with variable rent (10% of hotel revenues, Group Share): the portfolio is mainly let to Essendi (formerly AccorInvest), in France and Belgium. It also includes the variable portion of revenue from assets located in Spain, Italy and the UK, held under leases with a guaranteed minimum rent.

-       Hotel operating properties (34% of hotel real estate revenues, Group share): the majority of these hotels are located in France, Germany and Belgium.

Overall, variable revenues increased by +8.7% on a like-for-like scope year-on-year, thanks in particular to the excellent performance of hotel lease properties in southern Europe and hotel operating properties located in Nice and Lille.

Dividends in shares and strengthened balance sheet

Covivio Hotels paid its dividend in shares this year, with 82.3% of shareholders subscribing to the offer. Only £39 million in cash was used to pay the balance.

Covivio Hotels' net debt amounted to €1,965.5 million for the group's share, compared with €2,119 million at 31 December 2024. its average rate improved by 5 basis points, from 2.33% at the end of December 2024 to 2.28% at the end of June 2025, and its average debt maturity decreased to 4.4 years (compared with 4.8 years at the end of 2024). Covivio Hotels has a stronger debt coverage ratio of 101.6% at end-June 2025 (vs. 94.8% at end-2024), with a coverage maturity of 5.2 years. 

As at 30 June 2025, the loan-to-value (LTV) ratio stood at 29.8%. The interest coverage ratio (ICR) was

8.09x, up from 6.09x at the end of 2024.

At the end of June 2025, Covivio Hotels had liquidity (including undrawn credit lines) of €958 million attributable to the group.

In its annual review, S&P Global Ratings confirmed Covivio Hotels' financial rating at BBB+, with a stable outlook, in line with Covivio's rating. This confirmation recognises the strength of the company's operational and financial profile

Signing of a new lease with Radisson Hotel Group

Covivio Hotels signed a new lease with Radisson Hotel Group for an asset located at Roissy Charles de Gaulle airport, previously operated by Accor under a management contract. This 12-year lease is based on variable rent with a guaranteed minimum. The 4-star hotel with 305 rooms will be operated under the Radisson Blu brand. 

The transition from operating property to hotel lease property should lead to a significant improvement in revenues, which are expected to grow by more than 50% compared to 2024. 

This transaction marks a new stage in the strategic partnership between Covivio Hotels and Radisson Hotel Group and illustrates Covivio Hotels' ability to continuously optimize its revenues, by leveraging the flexibility of the different types of contracts (lease, franchise, management) and its in-depth knowledge of operators.

Recurring net result growth of +10.7% in H1 2025

Recurring net result (EPRA Earnings) of €132.3 million at the end of June 2025 (compared to €119.5 million at the end of June 2024), increased by +10.7% over a year, boosted by revenue growth. EPRA Earnings per share amounted to €0.88 (compared to €0.81 last year) an increase of +8.8%, taking the payment of the dividend in shares into account.

The EPRA NTA (net tangible assets) NAV was €4,006 million, compared with €3,815 million at the end of 2024, up +5.0% over the semester. It totals €25.4 per share, a decrease of -1.5% compared to the end of 2024, due to the payment of the dividend in shares in 2025. 

The EPRA NDV net asset value, which takes the fair value adjustment of interest rate hedges and fixed-rate debt into account, rose to €3,843 million, from €3,690 million at the end of December 2024, an increase of +4.2%. It totals €24.3/share.  

1.1.  Financial results

1.1.1. General principles

The condensed consolidated half-year financial statements have been prepared in accordance with International Financial Reporting Standard IAS 34 "Interim Financial Reporting", as adopted by the European Union. The rules and methods applied are identical to those used on 31 December 2024.

1.1.2. Half-year net income statement

Revenue Group share

Covivio Hotels' revenue attributable to the Group amounted to €163.4 million for the first half of 2025, up

5.3% compared to June 2024. On a like-for-like basis, fixed hotel rents rose by 6.2%, variable hotel rents by 41.0% and EBITDA from hotels owned by 3.5% compared with June 2024. Overall, variable revenues rose by +8.7% on a like-for-like basis year-on-year, thanks to the very good performance of leased hotels in Southern Europe and freehold hotels in Nice and Lille. 

1 LfL: Like-for-Like                                                                                                                                                                                                                                                                                             

Operating profit attributable to the Group

Operating profit amounted to €157.1 million for the Group's share on 30 June 2025, compared with €153.1 million at 30 June 2024. This slight change is mainly due to the change in the fair value of investment properties (+ €49.7 million), offset by the decrease in rental income (-€18 million) and EBITDA from hotels under management (+€26 million) offset by depreciation and amortisation for the period (-€31 million).

Financial result, Group share  

Financial income mainly consists of:

-       The cost of net financial debt of €-22.7 million, down €5 million compared with June 2024, in line with the decrease in average debt and its cost;

-       The financial expense on lease liabilities (-€7.8 million), generated by the application of IFRS 16, which requires lease contracts to be restated in the same way as finance leases;

-       The negative change in the fair value of financial assets and liabilities of -€6 million, considering changes in interest rates;

-       Foreign exchange gains of €0.5 million, compared with €0.4 million at 30 June 2024, related to our UK, Polish, Hungarian and Czech portfolios.

1.1.3. EPRA Earnings

EPRA Earnings amounted to €132.3 million as of 30 June 2025. This represents an increase of 10.8% compared with 2024. EPRA Earnings per share amounted to €0.88 as of 30 June 2025, compared with €0.81 as at the same date in 2024, representing an increase of 8.8%. 

1.1.4. Consolidated half-year financial position as of 30 June 2025

The simplified consolidated balance sheet attributable to the group as of 30 June 2025 is as follows  :

Operating properties decreased (-€70.1 million), mainly due to depreciation for the period (-€49.6 million) and the reclassification of a hotel in Germany to assets held for sale for -€32.1 million.

Investment properties increased slightly (+€12.4 million) over the period, mainly because of:

-          The change in fair value of real estate assets, amounting to €+ 49.7 million,

-          The decline in the value of the pound sterling (-€24.5 million)

-          The reclassification of new commitments on retail properties (-€4 million)

Assets held for sale also varied due to the disposal of the 2024 commitments and the signing of new 2025 commitments on retail assets and the disposal of a hotel in Germany.

Cash and cash equivalents consist of cash and marketable securities totalling €597 million, in anticipation of the repayment of a bond issue (€350 million) in the second half of the year.

On the liabilities side, shareholders' equity rose from €3,434 million on 31 December 2024 to €3,499 million at 30 June 2025. This change is mainly due to the impact of:

-          the positive result for the period of €114.5 million

-          the payment of the 2024 dividend of -€222 million, offset by the dedicated capital increase of +183 million, so a net amount of -€39 million

-          the change in the translation reserve of -€11 million

A detailed explanation of the various items is provided in the notes to the consolidated half-year financial statements.

1.1.5. Debt structure

As of 30 June 2025, net financial debt amounted to €1,966 million for the group.

Net financial debt attributable to the Group represents 29.8% of total revalued assets including rights attributable to the Group and 32.1% of total assets excluding rights attributable to the Group, excluding restatement of commitments.

Debt characteristics

The average debt rate was 2.28% (compared with 2.33% on 31 December 2024).

Debt by maturity

The average maturity of debt was 4.4 years on 30 June 2025, compared with 4.8 years on 31 December 2024.

Coverage

As of 30 June 2025, the Group's active hedge coverage ratio was 101.6%.

The net value of hedging instruments amounted to €90 million for the Group's share as of 30 June 2025. The change in value of hedging instruments over the period had a negative impact of €6.1 million on the Group's share of the income statement due to changes in interest rates.

1.2.  Assets as of 30 June 2025

Covivio Hotels' assets are valued at €6,501 million, excluding transfer taxes, representing €5,878 million attributable to the group, excluding transfer taxes.

Covivio Hotels' assets are broken down as follows:

⁽²⁾ Yield HD: Yield excluding duties .

On a like-for-like basis, hotel assets rose by 2.3% over the six-month period, driven mainly by assets located in France (+4.7%) and southern Europe (+3.3% in Spain, +2.6% in Italy). This growth is largely attributable to the consolidation of freehold and leasehold assets in France and Belgium, completed at the end of 2024, which resulted in a 10% revaluation of these assets.   

The hotel portfolio has an average yield excluding rights of 6.4% (stable over six months), of which 6.2% is on leased assets and 6.5% on freehold assets.  

Since 2005, Covivio Hotels' portfolio has evolved as follows (in € million):

Breakdown of rental income

Covivio Hotels has high visibility of its future cash flows thanks to long-term fixed leases with tenants who are leaders in their respective sectors and have high credit ratings.

Annualised rents

Annualised rental income and revenue from hotels (excluding retail outlets) amounted to €371.9 million as of 30 June 2025, broken down as follows:

Geographical breakdown

Breakdown by tenant/brand

1.2.1. Lease maturity schedule

The firm residual term of leases decreased by 0.3 years compared to 31 December 2024, representing a firm residual term of 10.7 years at the end of June 2025.

Rents, by lease expiry date, are broken down as follows:

1.2.2. Summary of the experts' work

As of 30 June 2025, the breakdown of the portfolio value (group share) between the real estate experts is as follows:

1.2.3. Occupancy rate

The financial occupancy rate measures the ratio between the annualised rent for occupied premises and the annualised rent if the premises were fully let.

The physical occupancy rate indicates the number of square metres occupied in relation to the number of square metres available for letting.

Both rates are stable at 100% for hotels as of 30 June 2025.

1.3.  EPRA indicators

As of 30 June 2025, EPRA NTA stood at €4,006 million (€25.4 per share), down 1.5% compared with 31 December 2024. EPRA NDV stood at €3,843 million (€24.3 per share), down 2.3% over six months.

1.4. Related companies

The main transactions between related parties during the first half of 2025 are detailed in section 2.2.7.3 of the notes to the consolidated half-year financial statements.

1.5. Risks and uncertainties

Covivio Hotels invites readers to refer to Chapter 2 of its 2024 Universal Registration Document (URD), which identifies the main risks and control measures implemented by the company.

Risks are rated based on a combined analysis of their potential negative impact (on the company's valuation, results, image and/or business continuity) and their probability of occurrence. Once quantified, the gross impact and probability are adjusted for the control measures in place to determine the net risk.

Following the risk review, those risks whose level could change in the second half of 2025, through an increase in their net impact and/or net probability, are presented below. The measures to control these risks (unchanged) are described in the 2024 URD available on the Covivio Hotels website. The other risks are unchanged at present.

1.5.1. Risks related to the environment in which Covivio Hotels operates

Unfavourable developments in the real estate market: decline or stagnation in values and revenues  Values

Covivio Hotels' total assets at the end of June 2025 (€7.2 billion on a consolidated basis) mainly consist of the appraised value of its properties, which amounts to €6.5 billion (more than 91%). As such, any change in the value of the properties has a direct impact on the balance sheet total.

The value of Covivio Hotels' assets depends on changes in the property markets in which the company operates. Both rent levels and market prices (and therefore the capitalisation rates used as comparable by experts) may be subject to fluctuations linked to the economic and financial environment. Covivio Hotels recognises its investment properties at fair value in accordance with the option offered by IAS 40.

As such, a decrease in appraisal values is likely to affect the value of Covivio Hotels' Net Asset Value and, potentially, its share price.

In the first half of 2025, the value of the hotel portfolio changed on a like-for-like basis by+ 2.3% (compared with +1.5% in 2024).

Higher borrowing rates may increase financing costs for investors and potential buyers, which may discourage some of them from entering into real estate transactions or making acquisitions. This could reduce market demand and put downward pressure on the valuation of Covivio Hotels' assets. 

The real estate market is dynamic and reacts to various economic and financial factors. An increase in interest rates may lead to adjustments in capitalisation rates based on risk perceptions and expected returns. Investors may demand higher returns to offset increased borrowing costs, which may result in higher capitalisation rates.

However, it should be noted that the impact of the increase in revenue expected by Covivio Hotels should limit the negative effect of a rise in rates.

For information purposes, the table below shows the sensitivity of the valuation of leasehold assets as of 30 June 2025 to yield rates (corresponding to the annualised normative rent/appraisal value of assets excluding duties):

                                                                 Decrease in capitalisation rate               Data as of                Increase in capitalisation rate

     * Total investment properties, excluding development portfolio and rights of use.                                                                                                 

The sensitivity of covenants to changes in appraised values is presented in section 1.5.2 "Financial risks".

Income

European tourism was very buoyant in the first half of the year, with average prices and occupancy rates continuing to rise in line with (or even exceeding) 2024 levels. Revenues for the first half of the year amounted to €163.4 million for the group's share (+5.3% on a like-for-like basis vs H1 2024). Nevertheless, the company remains sensitive to its share of variable revenues (assets whose rents are likely to vary according to hotel turnover, as well as rents for hotels owned under leasehold agreements), which represented 50% of its revenues on 30 June 2025.

Therefore, in the event of a deterioration in the economic environment, Covivio Hotels could, in addition to a decline in revenue, suffer value adjustments that could be amplified by interest rate increases.

The Company also benefits from long-term fixed-term leases, which means it has little exposure to vacancy risk over the next few years.

The table below shows the sensitivity of the fair value of investment properties to changes in rents. The capitalisation rate is constant at 6.2% (share of group data).

                                                                  Decrease in annualised rents                Data as of                 Increase in annualised rents

* Total investment properties, excluding development portfolio and rights of use.              

* Variation compared to the portfolio at 30 June 2025.

The impact of changes in value on the Company's covenants is presented in section 1.5.2 "Financial risks".

1.5.2. Financial risks   

Unfavourable changes in interest rates (borrowing and exchange rates)

Loans

Covivio Hotels could experience an increase in its financial expenses on its share of unhedged debt and, more generally, see its ability to implement its short/medium-term investment strategy limited.

With an average rate of 2.28%, Covivio Hotels' debt amounted to €2.1 billion at the end of June 2025. Its average active coverage ratio stood at 101.6%.

The following table shows the sensitivity of Covivio Hotels' EPRA Earnings to interest rate increases.

A 25 bps increase in the three-month Euribor rate would have an impact of -€0.3 million on EPRA Earnings.

A 50 bps increase in the three-month Euribor rate would have an impact of -€0.5 million on EPRA Earnings. A 100 bps increase in the three-month Euribor rate would have an impact of -€1.0 million on EPRA Earnings.

Change

A change in the exchange rate between the pound sterling and the euro could have a negative impact on Covivio Hotels' results and more specifically on the amount of rent received, as 13% of its assets are located in the United Kingdom.

Breach of bank covenants (LTV, ICR) linked to declines in value and/or income

The risks related to changes in values and revenues are detailed in the sections on the risk "Unfavourable developments in the real estate market: decline or stagnation in values and rents" (see above).

In the event of a breach of a covenant, Covivio Hotels would theoretically have to repay its entire debt. In practice, however, this risk appears unlikely, as banks generally prefer to renegotiate the existing financial terms with the borrowers concerned, as was seen during the 2008 financial crisis.

Covivio Hotels' most restrictive LTV (Loan to Value) covenant is 60% for an effective ratio of 32.1% as of 30 June 2025 (bank LTV). This means that the company could suffer a 46% decline in the value of its assets before reaching its LTV covenant.

Covivio Hotels' most restrictive ICR (Interest Coverage Ratio) covenant is 200%, with an effective ratio of 809% as of 30 June 2025.

1.6. Outlook for 2025

A leading player in European hotel real estate, Covivio Hotels is pursuing its strategy of growth and portfolio optimisation by actively enhancing the value of its existing assets through dynamic and targeted management.             

1.7. Transition tables

            1.7.1.      Transition tables

                      1.7.1.1.         Portfolio transition table

Portfolio (as of  30/06/2025)                                                                                                       5 914 M€

The fair value of fixed-rate debt is measured at the risk-free rate and excluding credit spreads.

                      1.7.1.3.          Rents transition table

                      1.7.1.4.         EPRA Earnings transition table

                                                                                  Net income            Non-

                                                                                                                                     Net Income,                                                  EPRA

€ million                                                                    100% IFRS        controlling                                      Restatements

                                                                                                                                    Group Share                                               Earnings

                                                                                   Accounts           interest

NET INCOME FOR THE PERIOD                                         120,6                   -6,1                 114,5                              17,8                  132,3

                      1.7.1.5.         Results of hotels under management

2.1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS AT 30 JUNE 2025

2.1.1         STATEMENT OF FINANCIAL POSITION 

Assets

Liabilities

2.1.2. STATEMENT OF FINANCIAL POSITION 

* See note 2.2.1 regarding the restatement of 2024 for compatibility.                                                     

     2.1.3     STATEMENT OF COMPREHENSIVE INCOME

* See note 2.2.1 regarding the restatement of 2024 for compatibility.   

     2.1.4     STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

     2.1.5     STATEMENT OF CASH FLOWS  

2.2. NOTES    TO   THE         CONSOLIDATED    FINANCIAL STATEMENTS

  GENERAL PRINCIPLES

2.2.1.1. Accounting standards

The condensed consolidated financial statements of the Covivio Hotels group as of 30 June 2025 have been prepared in accordance with the international financial reporting standard IAS 34 “Interim Financial Reporting”. As these are condensed financial statements, they do not include all the information required by IFRS and should be read in conjunction with the financial statements of Covivio Hotels for the fiscal year ended 31 December 2024. 

The accounts were approved by the Management on 15 July 2025.

•        Restatement of the 30 June 2024 column of the income statement for comparability purposes

To consider changes in the Group's hotel business model and changes in financing market conditions, the Group has made changes to the presentation of its income statement as of 31 December 2024. Details of these changes are presented in the Universal Registration Document in paragraph 4.2.1.1 Accounting Standards (p. 276).

•        Changes in accounting policies

The accounting principles applied to the condensed consolidated financial statements as of 30 June 2025 are identical to those used in the consolidated financial statements as of 31 December 2024, except for new standards and amendments whose application is mandatory from 1 January 2025 and which were not applied early by the Group.

The following amendments, which are mandatory as of 1 January 2025, did not have any impact on the Group's consolidated financial statements:

•        Amendment to "IAS 21 – The effect of changes in foreign exchange rates – Lack of Exchangeability". This amendment clarifies the treatment of foreign currency transactions when the spot exchange rate is not available. Given the Group's location, this amendment should not have any impact on the Group's financial statements.

•        Amendment to IFRS 7 and IFRS 9 – "Classification and measurement of financial instruments":

o    Derecognition: The amendments specify when a financial asset or liability is to be derecognised.

o    Financial liabilities: They allow liabilities settled through electronic payment systems to be derecognised before the settlement date, under certain conditions.

o    SPPI criterion: They clarify the analysis of the SPPI (Solely Payments of Principal and Interest) criterion for loans related to environmental, social and governance criteria.

The application of these amendments has not resulted in any significant changes in the presentation of the half-yearly consolidated financial statements.

These amendments will come into force for financial years beginning on or after 1 January 2026, subject to their adoption by the European Union:

•        IFRS 18 – Presentation and disclosure in financial statements

This standard is intended to replace IAS 1 on the presentation of financial statements and to amend, mainly, IAS 7 – Statement of Cash flows and IAS 8 – Accounting policies, changes in accounting estimates and errors.

This standard aims to:

•        Increase the comparability of the income statement by defining principles relating to their structure and content, in particular through three new categories of expenses and income that complement the existing categories "Tax" and "Discontinued operations": "Operation", "Investment" and "Financing";

•        Improve transparency in the use of certain Alternative Performance Measures in relation to the income statement;

•        Accentuate the relevance of the information disclosed by strengthening the requirements  in terms of grouping or details of the information disclosed in the primary statements and notes to the financial statements.

Subject to its adoption by the European Union, the application of IFRS 18 will be mandatory for financial years beginning on or after 1 January 2027, with retrospective basis. 

•        IFRS 19 – "Subsidiaries with no public disclosure obligation: Disclosures"

This standard aims to reduce the disclosure requirements in the notes for subsidiaries whose securities or debt are not listed. It is not applicable for the Group.

Subject to its adoption by the European Union, the application IFRS 19 will be mandatory for financial years beginning on or after 1 January 2027. 

                                              2.2.1.2.       Estimates and judgements

The financial statements have been prepared in accordance with the historical cost convention, except for investment property and certain financial instruments, which were recognised in accordance with the fair value convention. In accordance with the conceptual framework for IFRS, preparation of the financial statements requires making estimates and using assumptions that affect the amounts show in these financial statements. 

The significant estimates made by the Covivio Hotels group in preparing the financial statements mainly relate to:

•       the valuations used for testing impairment, in particular assessing the recoverable value of goodwill and intangible fixed assets;

•       measurement of the fair value measurement of investment properties, • measurement of the fair value measurement of derivative financial instruments,

•       measurement of provisions.

Due to the uncertainties inherent in any valuation process, the Covivio Hotels group reviews its estimates based on regularly updated information. These estimates take into account, where applicable, the financial impacts related to the commitments made by the Group on the effects of climate change (note 2.2.1.3 to the Consolidated Financial Statements). The future results of the transactions in question may differ from these estimates.

In addition to the use of estimates, Group management makes use of judgements to define the appropriate accounting treatment of certain business activities and transactions when the IFRS standards and interpretations in effect do not precisely address the accounting issues involved. 

2.2.1.3. Taking into account the effects of climate change 

In 2021, Covivio announced a new carbon trajectory and raised its ambitions to achieve a 40% reduction in greenhouse gas emissions by 2030, thus also raising the targets for Covivio Hotels. This objective, which concerns all scopes 1, 2 and 3, covers all activities in Europe and the entire life cycle of assets: materials, construction, restructuring and operation. 

Covivio Hotels continued its drive in terms of building certification: the proportion of assets with HQE, BREEAM, Green Key, GSTC or equivalent certification, in operation and/or under construction, reached 97.5% at the end of 2024. This strategy actively contributes to achieving the new Carbon Trajectory. It is accompanied by a commitment to work hand in hand with its clients to achieve its objectives by relying on its strong partnership.  

In addition, in accordance with European regulations, Covivio Hotels has published its eligibility and alignment rates with the European Taxonomy. This information is published in Chapter 3 (Sustainability Report) of the Universal Registration Document - Sustainability Report of Covivio Hotels in accordance with the European Directive on non-financial reporting (CSRD). This chapter details the climate change mitigation plan implemented by the Group.  

In terms of financing, Covivio Hotels has a Green Financing Framework and reclassified all its bond issues as green bonds in 2023. Covivio Hotels published a second Impact Report in 2025 to report on the performance of the portfolio in relation to the requirements of these frameworks. At the end of 2024, Covivio Hotels had an eligible portfolio under the Taxonomy of €4.1 billion (€3.3 billion net of external debt), covering €1.45 billion in bonds.   

The inclusion of the effects of climate change had no material impact on the judgements made and the main estimates required to prepare the financial statements.

2.2.1.4. Operating segments (IFRS 8)

The operating segments of the Covivio Hotels group are detailed in section 2.2.8.1

                                              2.2.1.5.       IFRS 7 – Reference table

Risk related to changes in the value of the portfolio                                  § 2.2.2.5

Liquidity risk                                                                                           § 2.2.2.1

Financial expense sensitivity                                                                   § 2.2.2.3

Sensitivity of the fair value of investment properties                                 § 2.2.5.1.3

Counterparty risk                                                                                    § 2.2.2.4

Covenants                                                                                             § 2.2.5.12.7

Exchange rate risk                                                                                 § 2.2.2.6

                                              2.2.1.6.        Conversion method

The financial statements of Covivio Hotels are presented in millions of euros, the euro being the Group's functional and presentation currency. Each Group entity determines its own functional currency. The functional currency corresponds to the currency of the economic environment in which the Company operates its principal activities. All items included in the financial statements of these entities are valued using this functional currency. 

Transactions in foreign currencies are initially recorded at the exchange rate prevailing on the transaction date. The assets and liabilities of subsidiaries are translated into euros at the exchange rate prevailing on the reporting date, while income and expenses are translated at the average exchange rate over the period. Exchange differences are recognised in equity.

 FINANCIAL RISK MANAGEMENT

The operating and financial activities of the company are exposed to the following risks:

                                              2.2.2.1             Liquidity risk

Liquidity risk is managed in the medium and long term with multi-year cash management plans and, in the short term, by using confirmed and undrawn lines of credit. On 30 June 2025, Covivio Hotels available cash and cash equivalents of €1,052 million, including €410 million in confirmed credit lines, €607 million in cash and cash equivalents and €35 million in granted unused overdraft facilities.  

The graph below shows the maturity of borrowing (in € million) including interest expense as of 30 June 2025.

Covivio Hotels Group debt totalled to €2,635.2 million as of 30 June 2025 (see 2.2.5.12).

The interest payable up to the extinguishing of all the debt, estimated based of the outstanding amount as of 30 June 2025 and the average interest rate on debt, totalled €258 million.

Details of debt maturities are provided in note 2.2.5.12.3 and a description of the banking covenants and accelerated payment clauses included in the loan agreements is presented in note 2.2.5.12.7.

                                              2.2.2.2.       Interest rate risk

The Group's exposure to the risk of changes in market interest rates is linked to its floating rate and longterm financial debt. 

To the extent possible, bank debt is almost systematically hedged by financial instruments (see 2.2.5.12.5). As of 30 June 2025, after taking interest rate swaps into account, an average of 101.6% of the Group's debt was actively hedged, and the bulk of the remainder was covered by interest rate caps, which resulted in the following sensitivity to changes in interest rate:

•       the impact of an increase of 100 bps on the rates at 30 June 2025 is €-1 million on the cost of net debt Group Share for 2025;

•       the impact of an increase of 50 bps on the rates at 30 June 2025 is -€0.5 million on the cost of debt Group Share for 2025;

•       the impact of a decrease of 50 bps on the rates at 30 June 2025 is+ 0.5 million on the cost of debt, Group Share in 2025.

                                              2.2.2.3.       Financial counterparty risk

Given Covivio Hotels Group’s contractual relationship with its financial partners, the company is exposed to counterparty risk. If one its counterparties is not in a position to honour its undertakings, the Group's net income could suffer an adverse effect.

This risk primarily involves the hedging instruments entered into by the Group and which would have to be replaced by a hedging transaction at the current market rate in the event of a default by the counterparty.

The counterparty risk is limited by the fact that the Covivio Hotels group is a borrower, from a structural standpoint. The risk is therefore mainly restricted to the investments made by the Group and to its counterparties in derivative product transactions. The company continually monitors its exposure to financial counterparty risk. The company's policy is to deal only with top-tier counterparties, while diversifying its financial partners and its sources of funding.

Counterparty risk in included in the measurement of cash instruments. As of 30 June 2025, the amount was €-3.1 million, compared with €-5.2 million as of 31 December 2024.

                                              2.2.2.4.       Lease counterparty risk

Covivio Hotels Group's rental income is fairly concentrated among a group of principal tenants (Accor, B&B, IHG, NH, etc.) who generate the bulk of annual rental income. 

The Covivio Hotels group is not significantly exposed to the risk of insolvency, since its tenants are selected based on their creditworthiness and the economic prospects of their market segment. The operating and financial performance of the main tenants is regularly reviewed. In addition, tenants grant the Group financial guarantees when leases are signed.

                                              2.2.2.5.       Risk related to changes in the value of the portfolio

Changes in the fair value of investments properties are recognised in the income statement. Changes in property values can thus have a material impact on the Group's operating performance.

The investment policy of the Covivio Hotels group seeks to minimise the impact of the various stages of the cycle by choosing investments that:

•       with long-term leases and high-quality tenants, to soften the impact of a reduction in market rental income and the resulting decline in real estate prices;

•       are located in major European cities.

The holding of real estate assets intended for leasing exposes the Covivio Hotels group to the risk of fluctuation in the value of real estate assets and lease payments.

Despite the uncertainty created by the economic downturn, this exposure is limited to the extent that the rental invoiced are derived from rental agreements, the term and diversification of which mitigate the effects of fluctuations in the rental market.

Rental income is indexed to rent indexation indices, to changes in Accor revenues and to the likelihood of the application of major underperformance clauses on the portfolio in the United Kingdom for the hotels concerned.

The sensitivity of the fair value of investment properties to changes in rental values and/or capitalisation rates is analysed in section 2.2.5.1.3.

                                              2.2.2.6.       Currency risk

The Group operates both inside and outside the Euro zone following the acquisition of hotel real estate assets in the United Kingdom, Poland, the Czech Republic and Hungary. The Group protected itself against fluctuations in the pound sterling by financing part of the acquisition in the United Kingdom through a foreign currency loan and by entering into a currency and interest rate swap.

Impact of a decrease in the GBP/EUR exchange rate on shareholders’ equity

-5% decrease in

                                                                                     -3,2% real increase           the GBP/EUR -10% decrease in the

                                                                30/06/2025         in the GBP/EUR      exchange rate (in GBP/EUR exchange

                                              2.2.2.7.       Risk related to changes in the value of shares and bonds

The Group is exposed to risks for two categories of shares (see § 2.2.5.2.2 and § 2.2.5.3.2):

•       available-for-sale securities measured at fair value. This fair value is the market price when the securities are traded on a regulated market;

•       securities of companies consolidated using the equity method are measured at their value in use. The value in use is determined based on independent assessments of the real estate assets and financial instruments.    

The Covivio Hotels group issued an inaugural bond in September 2018, a bond in July and November 2021 and a new €500 million bond in May 2024, the characteristics of which are presented in § 2.2.5.12.4.  

                                              2.2.2.8.       Marketing risk for properties under development

The Group is involved in property development. As such, it is exposed to various risks, in particular risks related to construction costs, late delivery and the marketing of assets. There were no building projects under development as of 30 June 2025.

                                              2.2.2.9.       Tax environment

The Group does not observe any major changes in the tax environment in France or in other countries that could impact results for the financial year ending 30 June 2025.

Stemming from a project by the OECD and the European Commission, the “PILLAR 2” international tax reform aims to guarantee a minimum effective taxation of 15% of groups with revenue of at least €750 million, and will be applicable from the 2024 fiscal year

The details expected from the bodies representing the reform, which take account of the specificities of the national schemes specific to REITs, have been postponed to 2025. In this context, and on the basis of the discussions and information obtained during the 2024 financial year and an OECD note from 2025 confirming the work in progress on REITs, no tax was recognised relating to the PILLAR 2 rules for the SIIC, SOCIMI and UK REIT scopes as of 30 June 2025.

For non-SIIC scopes, a provision of €75 thousand, taking into account the local corporate tax rate as of 30 June 2025, was made for the PILLAR 2 tax in Hungary.

                                              2.2.2.9.1.          Tax risks

Due to the complexity and formalism that characterise the tax environment in which Covivio Hotels conducts its activities, the Group is exposed to tax risks. After consulting our advisors, if a tax treatment presents a risk of adjustment, a provision is then made. 

There is no provisioned tax risk on 30 June 2025, for which the effects would be likely to significantly affect Covivio Hotels’ results or financial position.  

                                              2.2.2.9.2.           Deferred taxes

The impact of deferred taxation is mainly related to investments for which the SIIC regime does not apply (Germany, Belgium, Spain, Hungary, Ireland, Italy, the Netherlands, Poland, Portugal, the Czech Republic and the United Kingdom). In Spain, all Spanish companies have opted for the SOCIMI regime exemption. However, there is deferred tax liabilities related to assets held by companies prior to their option for the SOCIMI regime.

The deferred tax is mainly due to the recognition of the fair value of foreign assets and the Murs et Fonds activity (rate in Germany: 15.825%; rate in France: 25.83%). It should be noted that hotel activities are taxed in Germany at a rate ranging from 30.18% to 32.28% and that deferred tax liabilities for this activity have therefore been recognised at these rates.

In the United Kingdom, nine out of twelve companies have opted for the UK REIT exemption regime with effect from 1 January 2024. There is therefore no longer any deferred tax on this part of the assets. 

 SCOPE OF CONSOLIDATION

2.2.3.1. Accounting principles relating to the scope of consolidation

✓ Consolidated subsidiaries and structured entities – IFRS 10

These financial statements include the financial statements of Covivio Hotels and the financial statements of the entities (including structured entities) it controls and its subsidiaries. 

The Covivio Hotels group has control when it:

•       has power over the issuing entity;

•       is exposed to, or is entitled to, variable returns due to its ties with the issuing entity;

•       has the ability to exercise its power in such a manner as to affect the amount of returns that it receives. 

The Covivio Hotels group must reassess whether it controls the issuing entity when facts and circumstances indicate that one or more of the three factors of control listed above have changed.

A structured entity is an entity structured in such a way that the voting rights or similar rights do not represent the determining factor in establishing control of the entity; this is particularly the case when the voting rights only involve administrative tasks and the relevant business activities are governed by contractual agreements.

If the group does not hold a majority of the voting rights in an issuing entity to determine the power exercised over an entity, it analyses whether it has sufficient rights to unilaterally manage the relevant activities of the issuing entity. The group takes into consideration any facts and circumstances when it evaluates whether the voting rights it holds in the issuing entity are sufficient to confer power to the Group, including the following:

•       the number of voting rights held by the Group compared to the number of rights held respectively by the other holders of voting rights and their distribution;

•       the potential voting rights held by the Group, other holders of voting rights or other parties;

•       the rights under other contractual agreements;

•       the other facts and circumstances, where applicable, which indicate that the Group has, or does not have, the ability to manage relevant business activities at the moment when decisions are to be made, including voting patterns during previous shareholders' meetings.

Subsidiaries and structured entities are consolidated using the full consolidation method.

✓  Equity affiliates – IAS 28

An entity affiliate is an entity in which the Group has significant influence. Significant influence is the power to participate in decision related to the financial and operating policy of an issuing entity without, however, exercising control or joint control over those policies.

The results, assets and liabilities of equity affiliates are accounted in these consolidated accounts according to the equity method.

✓  Partnership (joint control) – IFRS 11

Joint control means the contractual agreement to share the control exercised over a company, which only exists in the event where the decisions concerning relevant business activities require the unanimous consent of the parties sharing control.

✓  Joint ventures

A joint venture is a partnership in which the parties that exercise joint control over the operation have rights to its net assets. 

The results, assets and liabilities of joint ventures are accounted for in these consolidated financial statements using the equity method.

✓ Joint operations

A joint operation is a partnership in which the parties that exercise joint control over the operation have rights to the assets and obligations for the liabilities relating to it. These parties are called joint operators.

A joint operator must recognise the following items in respect of its interest in the joint operation:

•       its assets, including its proportionate share of jointly held assets, if any;

•       its liabilities, including its share of jointly assumed liabilities, if any;

•       the revenue it has earned from the sale of its share of the output generated by the joint operation;

•       its share of the proceeds from the sale of the output generated by the joint activity;

•       the expenses it has incurred, including its share of jointly incurred expenses, if any.

The joint venturer recognises the assets, liabilities, income and expenses relating to its interests in a joint operation in accordance with the IFRS standards applicable to those assets, liabilities, income and expenses.

No company in the group is considered a joint operation.

                                              2.2.3.2.       Change in holding rate and change in consolidation method 

None. 

                                              2.2.3.3.       List of consolidated companies

Additions and disposals are presented in the table below at the beginning or end of each business segment.

The registered office of the parent company Covivio Hotels and its main fully consolidated French subsidiaries are located at Rue de Madrid – 75008 Paris. The registered office of its main Luxembourg subsidiaries is located at 21 avenue de la gare, L-1611 Luxembourg.

There are 195 companies in the Covivio Hotels Group, including 153 fully consolidated companies and 41 equity affiliates. 

                                              2.2.3.4.       Assessment of control

✓ OPCI Foncière B2 Hôtel Invest (consolidated structured entity)

OPCI Foncière B2 Hôtel Invest, 50.2% owned by Covivio Hotels as of 30 June 2025, is fully consolidated. 

Governance decisions at the OPCI are taken by a majority of the six members of the Board of Directors (Covivio Hotels has three representatives, including the Chairman, who has a casting vote in the event of a tie).

Considering the rule of governance that grant Covivio Hotels powers giving it the ability to affect asset yields, the company is fully consolidated.

  SIGNIFICANT EVENTS DURING THE PERIOD

The significant events during the period are as follows:

2.2.4.1. Business update

The first half of 2025 marks a generally positive trend, with the continued increase in RevPar and occupancy rates slightly higher than in 2024. 

This change in business activity resulted in:

•       a €18 million decrease in group share of rents due to the consolidation of the Vauban assets (-€10 million) and the disposal of Accor hotels (-€5 million);  

•       an increase in variable rents on leased properties (+€5 million); •            the depreciation of the pound sterling (-3.2%);

2.2.4.2. Vauban agreement 

An agreement with AccorInvest was reached on 29 November 2024 for the sale of 16 assets. In exchange,

Covivio Hotels and its partners received 43 hotel businesses whose buildings were already owned by the Group in France, Belgium and Germany. This consolidation transaction represents an exchange value of nearly €800 million. The final price of the transaction will be confirmed in the second half of 2025.

2.2.4.3. Capital transaction

Following the Combined General Meeting held on 15 April 2025, 9,848,860 shares were issued at €18.57, representing €183 million for an effective distribution of €222 million.  

In addition, the payment of a dividend for the 2024 financial year of €1.50 per share was approved, as well as the option for each shareholder to opt for payment of the dividend in shares. At the end of the subscription period, which ran from 28 April 2025 to 13 May 2025 inclusive, 82.31% of the capital opted for payment of the dividend in shares. Covivio opted for payment of the dividend in shares and now holds 53.23% of the capital of Covivio Hotels (+0.7 points). 

2.2.4.4.      Asset disposals 

During the financial year, the Covivio Hotels group sold 4 hotels in France for €38 million, 2 hotels in Poland, ending Covivio Hotels' operations in that country, for €16.5 million, and 5 shops.  

2.2.4.5.   Financing and reimbursement

A repayment of commercial paper was made during the first half of 2025 for €78 million.  

2.2.5.  NOTES TO THE STATEMENT OF FINANCIAL POSITION

2.2.5.1.  Portfolio 

2.2.5.1.1. Accounting principles relating to intangible and tangible assets

✓ Business combinations (IFRS 3) and goodwill

An entity must determine whether a transaction or other event constitutes a business combination within the meaning of IFRS 3, which states that a business is an integrated group of activities and assets that can be managed and operated to provide a benefit (dividends, lower prices or other economic benefits) directly to investors.

In this case, the acquisition price corresponds to the fair value at the date of exchange of the assets and liabilities contributed and the equity instruments issued in exchange for the acquired entity. Goodwill is recognised as an asset for the excess of the acquisition price over the acquirer's interest in the fair value of the assets acquired, net of deferred taxes, if any. Badwill is recognised in the income statement.

To determine whether a transaction is a business combination, the Group considers, in particular, whether an integrated set of activities is acquired in addition to the property, the criteria for which may be the number of assets and the existence of processes such as asset management or marketing activities.

Any additional consideration is measured at fair value at the acquisition date. It is definitively measured within 12 months of the acquisition date. Any subsequent change in this additional consideration is recognised in profit or loss for the period.

After initial recognition, goodwill is tested for impairment at least once a year. The impairment test consists of comparing the net book value of intangible and tangible assets and associated goodwill with the valuations of hotels as "Operating Properties" carried out by real estate experts. In 2024, the acquisition of the business assets of the Vauban transaction required the recognition of goodwill of €210 million. The price paid to acquire these business assets is part of the value of the "Operating Properties" asset as valued by the real estate expert. The Group did not pay any additional price to acquire these businesses. The goodwill presented in the balance sheet therefore constitutes the fair value of the businesses acquired, whose related property assets are recognised as operating properties in the Group's balance sheet. The final price will be confirmed in the second half of 2025.

If the Group concludes that this is not a business combination, the transaction is accounted for as an acquisition of assets and the appropriate standards are applied to the assets acquired.

The costs related to the acquisition classified as a business combination are recognised as expenses in accordance with IFRS 3 and are included in the line "result from changes in scope" in the income statement, while the costs of an acquisition not classified as a business combination are an integral part of the assets acquired.

✓ Investment properties (IAS 40)

Investment property is real estate held for rental income or for capital appreciation over the long term (or both).

Investment properties represent the majority of the company's assets. 

Owner-occupied buildings are recognised as property, plant and equipment at amortised cost.

In accordance with the option offered by IAS 40, investment properties are measured at fair value. Changes in fair value are recognised in profit or loss. Investment properties are not depreciated. 

Covivio Hotels' assets are valued by independent experts who are members of AFREXIM (including

Cushman, BNP Paribas Real Estate, CBRE, BPCE Expertise, MKG and Savills) on a half-yearly basis, with two valuations carried out, one on 30 June and the other on 31 December. The real estate experts are also members of the RICS.

Investment properties are valued at fair value excluding rights and including rights, and rents are valued at market value. They are recorded in the accounts at their fair value excluding rights.

The methodology differs depending on the type of asset:

•       Valuation of hotels

The value of hotels was determined by discounting future annual net income based on the following principles:

•       cash flow projections were mainly valued over 10 years;

•       cash flows are determined based on rents, which are themselves based on hotel revenues, and Covivio Hotels' direct investments are deducted from cash flow;

•       Rents are calculated by applying a fixed rate to hotel revenue. Rates vary depending on the brand and location of the asset.

•       Discount and capitalisation rates are determined on the basis of the risk-free interest rate plus a risk premium associated with the property.

•       Valuation of Club Méditerranée in Portugal

The holiday village was valued by capitalising the rental income it is likely to generate.

•       Valuation of non-significant activities

The retail outlets were valued by capitalising the rental income they are likely to generate (taking into account the estimated normative rent that the asset is likely to bear) and by discounting all rental income over the remaining term of the lease. 

The values thus obtained are also cross-checked with the initial rate of return, the market values per square metre of comparable transactions and transactions carried out by the Group.

IFRS 13 on fair value establishes a three-level fair value hierarchy for data used in valuations: 

•       Level 1: the measurement refers to (unadjusted) prices in an active market for identical assets/liabilities available at the measurement date;

•       Level 2: the measurement refers to valuation models using input data that can be observed directly or indirectly in an active market;

•       Level 3: the valuation refers to valuation models using inputs that are not observable in an active market. 

The fair value measurement of investment properties involves the use of different valuation methods using unobservable or observable inputs that have been subject to certain adjustments. As a result, the Group's property portfolio is considered to be, in its entirety, Level 3 in the IFRS 13 fair value hierarchy.

✓   Assets under development (IAS 40)

Properties under construction are measured in accordance with the general fair value principle unless it is not possible to determine fair value reliably and consistently. In this case, the property is measured at cost. 

Consequently, development, extension or restructuring programmes for existing properties that are not yet in use are measured at fair value and classified as investment properties once the criteria for reliable measurement of fair value are met (administrative, technical and commercial criteria). 

In accordance with revised IAS 23, during construction and renovation, borrowing costs are included in the cost of qualifying assets. The amount capitalised is determined on the basis of the financial expenses paid for specific borrowings and, where applicable, for financing from general borrowings on the basis of the weighted average rate of the relevant debts. 

✓   Right-of-use (IFRS 16)

In accordance with IFRS 16, when a property or equipment is held under a lease, the lessee must recognise a right-of-use asset and a lease liability at amortised cost.

Assets recognised as rights of use are included in the items where the underlying assets would be presented if they were owned, i.e. Operating property, Other property, plant and equipment and Investment property.

The lessee amortises the right-of-use asset on a straight-line basis over the term of the lease, except for rights relating to investment property, which are measured at fair value.

✓   Tangible fixed assets (IAS 16)

In accordance with the preferred method proposed by IAS 16, hotels managed by the Murs et Fonds business (occupied or operated by the Group's teams - own-occupied buildings) are measured at historical cost less accumulated depreciation and any impairment losses. They are depreciated over their useful life using a component approach.

Hotels operated as buildings and land are depreciated according to their useful life:

If the appraised value of buildings and land is less than the net book value, a write-down is recognised, first against the value of the land and then against the value of tangible fixed assets.

✓   Assets available for sale (IFRS 5)

In accordance with IFRS 5, when Covivio Hotels decides to dispose of an asset or group of assets, it classifies it as an asset held for sale if:

•       the asset or group of assets is available for immediate sale in its present condition, subject only to conditions that are customary and usual for the sale of such assets;

•       its sale is probable within one year, and marketing activities have been initiated.

For Covivio Hotels, only properties that meet the above criteria and/or for which a sale agreement has been signed are classified as current assets held for sale. 

If a promise to sell exists at the balance sheet date, the fair value of the asset held for sale is the price of the promise net of costs.

2.2.5.1.2. Table of changes in fixed assets 

          •     Goodwill

On 29 November 2024, Covivio Hotels acquired from AccorInvest and its subsidiaries 100% of the shares of companies that own hotel businesses whose buildings were previously owned by the Covivio Hotels group. 

The transaction therefore involves the acquisition by Covivio Hotels (and its partners for the 2 joint ventures) of 43 businesses, enabling the consolidation of these hotels, which will be held as property and land by Covivio Hotels, in exchange for the transfer to AccorInvest of the property and land of 16 other hotels, which will then be held as property and land by AccorInvest. 

In total, the consolidation transactions involving Covivio Hotels (consolidated assets) and the joint ventures (investments in equity-accounted companies) represent a total value of €369 million for the hotel properties sold by AccorInvest to Covivio Hotels and its partners, equivalent to the value of the businesses owned and operated by the companies whose shares were acquired. The purchase price was settled by offsetting seller credits from the sale of the properties to AccorInvest. The purchase price amounts to €241.2 million for the 24 consolidated businesses acquired.

The transaction with AccorInvest enables Covivio Hotels to strengthen its hotel presence in areas with high tourist appeal and significant value creation potential through repositioning and management optimisation.

Goodwill corresponds to the difference between the total cost of the business combination (€241.2 million) and the equity acquired (€31.1 million) and amounts to €210.1 million.

The revised IFRS 3 standard provides for a maximum period of 12 months from the acquisition date for the final accounting of the acquisition: adjustments to the valuations made must relate to facts and circumstances existing at the acquisition date. Therefore, after this 12-month period, any additional consideration must be recognised in profit or loss for the period unless its counterpart is an equity instrument.

As of 30 June 2025, sensitivity tests on goodwill were carried out and triggered an impairment of €0.2 million on Operating Properties in France. A 2.5% decline in appraised values would result in additional impairment losses of €0.4 million, including €0.1 million from the Vauban portfolio acquired at the end of 2024, and a 5% decline in values would result in additional impairment losses of €1.7 million, including €0.8 million related to the Vauban portfolio.

Position as of 31 December 2024 :

•       Intangible fixed assets

Position as of 31 December 2024: 

•       Operating properties (valued at cost)

                                                                                                          Increase/      Disposal,     Additions/

(In € million)                                                                   31/12/2024   acquisitions     scrapping      reversals      Transfers         Others    30/06/2025

The value of hotels operated under lease agreements amounted to €1,580.9 million as of 30 June 2025 and is presented under "Operating properties (valued at cost)". In accordance with IFRS, owner-occupied buildings do not meet the definition of investment property and are recognised and measured at amortised cost.

The "Increase/acquisitions" column mainly includes:

-       works carried out on the Belgian portfolio for €4.3 million;

-       works carried out in England for €3.9 million;

-       works carried out in France for €3.5 million;

-       the purchase and renewal of furniture for €3.1 million;

The "Additions/reversals" column (-€50.1 million) includes depreciation for the period, of which -€23.3 million relates to the Vauban portfolio.

The "Others" column (-€34.8 million) mainly includes:

-       The reclassification to assets held for sale of the companies owning the buildings and land of a hotel in Germany (€33.9 million).

-       The impact of exchange rate fluctuations of -€3 million on hotels operated in the United Kingdom

The "Transfers" column (-€1.9 million) corresponds to reclassifications between operating properties and other tangible fixed assets.  

Position as of 31 December 2024: 

New consolidation              Increase/         Disposal,                Additions/

(In € million)                                                                                      31/12/2023                  scope    acquisitions      scrapping        reversals        Transfers      Indexation            Others      31/12/2024