Park Plaza London Waterloo sold to CBRE Global Investors
PPHE Hotel Group Limited, which together with its subsidiaries (the Group), owns, leases, develops, operates and franchises full service upscale, upper upscale and lifestyle hotels in major gateway cities, regional centres and select resort destinations, predominantly in Europe, is pleased to announce that one of its wholly owned subsidiaries has exchanged contracts to sell and leaseback Park Plaza London Waterloo (the Hotel).
A unit trust created on behalf of several clients of CBRE Global Investors is purchasing the Hotel for £161.5 million subject to a sale and 199 year leaseback. The initial rent of £5.6 million per annum will have annual inflation adjustments subject to a cap and a collar.
CBRE Global Investors carried out an independent valuation of the Hotel giving an aggregate value of £250.0 million (approximately £500 thousand per key). The sale and leaseback enables the Group to release 65% of that value whilst retaining a long term lease, control of the operations and associated profits of the Hotel thereby keeping the remaining 35% within the Group. As at 31 May 2017, the Hotel had a book value of approximately £124 million.
The transaction, which is subject to certain conditions precedent commensurate with the sale and leaseback being fulfilled, is expected to complete in July 2017.
Following the repayment of the existing facility and the deduction of the transaction costs associated with the sale and leaseback, together expected to be approximately £80 million, approximately £80 million will be readily available cash and is intended to be used to further improve and grow the Group’s portfolio amongst other corporate purposes.
Boris Ivesha, President and Chief Executive Officer of PPHE Hotel Group, said:
“This sale and leaseback will unlock the capital invested in Park Plaza London Waterloo whilst allowing us to continue to benefit from the operation and associated profits. This transaction is in line with our strategy to realise shareholder value.”
Source : PPHE Hotel Group