First Sponsor, the Singapore-listed property group, has added the five-star Hilton Rotterdam to its growing hotel portfolio in the Netherlands.
First Sponsor and four co-investors acquired the 254-room hotel from Park Hotels & Resorts, a REIT spin-off from the Hilton Worldwide Holdings. The investment volumes of €51 mln equates to €201,000 per key.
The vendor said the price also represented a 4.8% capitalization rate on the hotel's projected 2017 net operating income, or 17.8x the hotel’s projected 2017 EBITDA.
The Hilton Rotterdam Hotel is a five-star, freehold property located in the central business district of Rotterdam.
The hotel
The 254-bedroom hotel was built in 1963 and was renovated between 2011 and 2013 for €37.5 mln. It has a monumental status and is regarded as a key landmark in Rotterdam. The hotel also has eight meeting facilities spanning 1,533 m2 of space, a fitness and wellness area, an executive lounge and an underground basement with 31 parking spaces.
Hilton International (Nederland) manages the property under a long long-term management contract.
The buyers intend to carry out a restructuring exercise whereby First Sponsor will acquire the hotel business operations and lease the hotel on a long-term basis.
Rotterdam
Neo Teck Pheng, group CEO, said, 'First Sponsor is pleased to have the opportunity to acquire another prime freehold hotel asset in the dynamic city of Rotterdam. Rotterdam is the second largest city in the Netherlands after Amsterdam and is home to the largest seaport and industrial complex in Europe. These factors make Rotterdam a key logistics centre both nationally and internationally.
'Beyond this, Rotterdam is also the second most popular city for tourism in the Netherlands and has quickly established itself as a credible travel destination for both business and leisure visitors. The acquisition of the Hilton Rotterdam Hotel, together with the group’s Parkhotel Rotterdam acquired as part of the Bilderberg Portfolio in 3Q 2017, will help the group to capitalize on the growing hospitality demand trends. With this acquisition, the group co-owns two of the leading hotels in the centre of Rotterdam city.'
Hospitality investor
First Sponsor is a mixed property developer in the Netherlands and the People’s Republic of China (PRC), and owner of commercial properties and provider of property financing services in the Netherlands, Germany and the PRC.
Last July First Sponsor staked a claim to being one of the largest hotel owners in the Netherlands by the joint acquisition of 17 assets operated by the Bilderberg hotel chain for €205 mln.
The vendor
For Park Hotel & Resorts, the sale of the Hilton Rotterdam was part of the REIT's strategy of recycling capital out of non-core assets, including reducing its exposure to international markets. Revenue per available room (RevPAR) for the Hotel represents a discount of nearly 30% to Park’s pro forma RevPAR on a trailing 12-month basis.
'I am thrilled to announce the sale of the Hilton Rotterdam, our first non-core asset sale since launching Park just over a year ago. As previously stated, we remain committed to our goal of creating value for stockholders by recycling capital from lower growth assets,' commented Thomas Baltimore, Jr., chairman and CEO of Park.
