Northern Europe hotel specialist Pandox has bought three London aparthotels for around £230 million.
The Residence Inn by Marriott-branded hotels have 503 rooms which are operated by Axiom Hospitality. The average room size is 28 square meters and there are several room configurations, each with a kitchen or kitchenette. The locations and room configurations mean the hotels cater for long and short stays for business and leisure travellers, which together with efficient hotel operations, lay the foundation for high profitability.
London aparthotels revenue
Initially, the hotels are expected to contribute around £34 million a year in revenues and approximately £17 million in net operating income. which equals a yield of more than 7%. Over time, there is potential to increase the average daily rate and the yield through targeted investments. The acquisition is financed by available cash funds and also a new green bank loan.
Pandox CEO Liia Nõu says, “We are happy to have acquired three well-positioned freehold aparthotels in strong locations in central London, thereby increasing our exposure towards the attractive ‘extended-stay’ segment.
“The hotels are highly profitable, and the hotel products are well established in the market with strong distribution via Marriott International, which becomes a new cooperation partner to us.
“The hotel properties are of high technical and environmental standard and contribute positively to the overall quality of our hotel property portfolio. Through the acquisition, we also increase our already strong hotel operating partnership with Axiom Hospitality to a total of eight hotels in the UK.”
The transaction includes hotel properties and hotel operations through the acquisition of shares in companies. The sellers are controlled affiliates of Starwood Capital. The hotel properties are freeholds.
The acquisition is financed by available cash funds and a new secured and green bank loan, enabled by the properties’ favourable energy rating.
The hotel properties will be reported in the business segment Own Operations.
Pandox already owns three hotels in the greater London area: Leonardo Hotel London Croydon (Leases), Hilton London Heathrow Airport T4 (Leases) and also Hilton Garden Inn London Heathrow Airport (Own Operations) with a total of 1,002 rooms.
