Northern European hotel property specialist Pandox has entered into an agreement to acquire The Midland Manchester, an iconic upper premium hotel with 312 rooms in the heart of Manchester in the UK.
The transaction, which was made together with Fattal Hotels Group as operating partner, amounts to £115 mln (€131 mln), £102 mln of which for the hotel asset and the rest for the operational business.
The acquisition is expected to be financed by a new bank loan and existing credit facilities, the buyers said. It is planned to close during the fourth quarter of 2018.
The property is expected to contribute the equivalent of SEK 69 mln in rental income in 2018, on an annualised basis, Pandox added.
'The acquisition meets all of Pandox’s acquisition criteria', commented CEO Anders Nissen. 'The hotel, which has iconic status in Manchester, is an upper premium, full-service hotel with a very attractive central location and demand from all client segments. The hotel offers clear potential for increased revenues by upgrading the room product and by increasing the number of rooms. After the acquisition, Pandox will own two hotel properties with strong central locations in a city which is the economic and cultural nexus in one of the fastest growing regions in the UK.'
The acquired hotel property has a yield of approximately 5.7%, before transaction costs. It will be operated by Fattal under a 35-year revenue-based lease agreement where the tenant has responsibility for maintenance, repair and investments in the property.
