Redefine International has announced that it has, through its 71% held subsidiary Redefine Hotel Holdings Limited, completed on the acquisitions of the remaining 40% interest in the 150 bedroom Holiday Inn Express Hotel in Earls Court and the 48 bedroom extension at the Southwark Holiday Inn Express.
The purchase consideration of GBP6.3 million for the remaining 40% interest in the Hotel implies a value of GBP28.1 million and a net initial yield of 7.0%. The Hotel is located close to the Earls Court Exhibition Centre and Arena and the Olympia Exhibition Centre and is trading ahead of expectations, with underlying occupancy at 86% for the nine month period ended 31 May 2014.
The Extension was acquired for GBP11.35 million, and the purchase consideration reflects a net initial yield of approximately 6.7%. The trading performance of the Extension has remained steady since the opening of the additional rooms on 1 June 2014, with overall occupancies and RevPars in line with figures for the existing 88 bedrooms.
Both hotels form part of the Company’s existing portfolio of seven hotels held through RHH, for which the existing bank loan has been refinanced, as previously announced. The new facility comprises a GBP 96.0 million loan for a six year term at a margin of 2.275%. 75% of the loan has been hedged with a 3.0% interest rate cap for the remainder of the loan term.