Aberdeen Standard Investments has acquired a hybrid home-hotel asset from UK property firm Lamington.
The asset manager has invested £10m (€11.2m) of behalf of a fund it manages to buy room2 Southampton in a sale and leaseback deal.
Constructed in 2018, room2 Southampton comprises 71 studio bedrooms each with its own kitchenette, an open plan living room at ground floor, along with flexible meeting room and event spaces and a fitness studio.
The asset, which offers what is referred to as a “hometel”, combines elements from Airbnb, serviced apartments and boutique hotels.
James Dunne, head of transactions at Aberdeen Standard Investments, said the room2 platform in the extended-stay market has demonstrated its resilience through an unprecedented period of disruption.
“The ability to pivot between long and short stay augments the lean operational model without compromising on service.
“This not only protects business in a downturn but, as importantly, should allow for future outperformance with the quality facilities and flexibility of the product being attractive to both business and leisure travellers when markets normalise.”
Robert Godwin, managing director at Lamington and room2, said agreeing this transaction with Aberdeen Standard allows Lamington to take the step to “institutional-grade where the strengths of the brand, model, positioning and real-estate backed covenant are fully valued”.
“We hope this partnership will lead to further investment into more room2’s in the near future. The proceeds of the disposal are earmarked for reinvestment into acquisition opportunities as we remain on track to deliver 5,000 keys by 2030.”
Knight Frank and Savills advised Aberdeen Standard and room2 respectively on the deal.
Richard Dawes, director in the hotel capital markets team at Savills, said securing one of the UK’s leading institutional partners for Lamington, at pricing levels that reflect the robust performance of the asset through the pandemic, is a significant endorsement in both the platform’s long-term prospects as well as the team behind it.
“The extended-stay sector has demonstrated its flexibility to adapt and perform resiliently over recent months and we expect this theme to continue and support the continued role out of what is a truly exciting concept.”
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