Days after buying three London aparthotels, Pandox has agreed to acquire the DoubleTree by Hilton Edinburgh City Centre hotel for £49 million.
The sellers are controlled affiliates of Starwood Capital. Closing is expected to take place by the fourth quarter 2024.
DoubleTree by Hilton Edinburgh City Centre has 138 spacious guest rooms, generous conference facilities, restaurant, bar and an event venue with views of Edinburgh Castle. The hotel underwent an extensive renovation in 2014 when it was rebranded.
DoubleTree by Hilton Edinburgh City Centre will be operated under a management agreement with Axiom Hospitality. The deal is expected to be financed by available cash funds and a new bank loan.
Liia Nõu, CEO of the Northern Europe hotel specialist, says, “DoubleTree by Hilton Edinburgh City Centre is a nice addition to our hotel property portfolio. The hotel is performing well with potential to further develop the hotel product and increase the return over time. The cooperation with Axiom Hospitality, which will comprise nine hotels in the UK, ensures effective operations and lower operational risk. The transaction is a good example of our ability to identify and make acquisitions which contribute to our earnings short term, while also laying the foundation for additional value creation long term.”
The existing franchise agreement expires in 2027. During this time, Pandox will evaluate both the hotel’s brand strategy and operational model.
Initially, the hotel is expected to generate a yield of more than 7.5%. Therer is the potential to increase it to approximately 9%, through active operational improvements and targeted investments.
In Edinburgh, Pandox already owns Aparthotel Adagio Edinburgh Royal Mile with 146 rooms in the business segment Leases.
Last week, Pandox announced it had bought three Residence Inn by Marriott-branded hotels with 503 rooms.
