Swedish hotel investor Pandox has completed its acquisition of Lone Star’s Jurys Inn hotel portfolio for around £800m – a 5.8% yield.
The portfolio includes 37 regional Jurys Inn hotels ,comprising around 8,000 bedrooms as well as the 364-bedroom Hilton Garden Inn, Heathrow.
The transaction has been made alongside Fattal Hotels Group, Leonardo, which will act as operating partner.
Under new ownership Pandox will retain 20 investment properties and one operating property – the Hilton Garden Inn at Heathrow – in the UK and Ireland, and Leonardo will acquire the operating platform and the 36 hotels operating under the Jurys Inn brand.
Pandox will operate the 364-bedroom Heathrow property, which will remain under the Hilton Garden Inn brand. Pandox also owns the Hilton London Heathrow.
The investment properties will then be operated by Leonardo under a long-term revenue-based lease agreement.
The acquisition will be fully financed with a new bank loan, existing credit facilities and a loan from Leonardo of £120m, which will be initiated after the portfolio has been re-organised, after which Pandox’s share of the acquisition will amount to £680m.
Anders Nissen, chief executive of Pandox, said: “The acquisition fulfils all Pandox’s strategic criteria regarding countries, cities and locations, as well as size, segment and profitability, contributing to a further diversification of our revenue base. The hotel properties are of high quality, belong to the profitable upper mid-market segment and will bring an immediate and substantial contribution to earnings.
“Through the acquisition, Pandox adds 20 new hotel cities to the portfolio and achieves a considerable market presence in the UK and the Republic of Ireland, which are large and dynamic hotel markets.”
David Fattal, chief executive of Fattal Hotels Group, said: “For us, the acquisition of Jurys Inn hotels represents a huge step forward in our growth. With this, we have the opportunity to further expand and strengthen our expertise and brand awareness in Europe.”
Tim Sharpen, deal lead at KPMG UK, which carried out due diligence, structuring and SBA advice for Pandox, said: “This deal, along with the Aprirose/Cindat acquisition of QHotels earlier in the year, demonstrates a continued appetite from overseas investors in UK hotels – particularly outside of London.”
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