Hotel property owner Pandox has agreed to purchase the 269-room Radisson Blu Hotel Tromsø, situated in Tromsø, Norway, from DNB Eiendom.
The property was built in stages from the 1960s to 2007. Radisson Blu has leased the building since the 1970s, with the current lease expiring in 2027.
The approximately NOK 750 mln (€64 mln) purchase price will be covered by Pandox's existing funds and a new bank loan. The acquisition is expected to be finalised in the first quarter of 2025.
Liia Nõu, CEO of Pandox, said: ‘We are very happy to acquire Radisson Blu Hotel Tromsø. Northern Norway is an exciting region and Tromsø is one of the strongest hotel markets in the Nordics with a high attractiveness among international visitors. The hotel has a very strong location in central Tromsø and attracts all guest segments. The hotel is today performing very well, and we complete the acquisition at a high yield. At the same time, we see large potential, through targeted investments, to create one of northern Scandinavia’s leading full-service hotels for leisure-, business- and group travelers.’
CEO Gro Boge of DNB Næringseiendom added: 'The property has given us a good return during our ownership period. The fact that we now choose to sell this property is part of the adjustment of DNB Livsforsikring's property portfolio. The hotel market in Tromsø is historically good, and we believe the timing is good to dispose of the property.'
Radisson Blu Tromsø enjoys high occupancy and average daily rates. Pandox and Radisson Hotel Group plan to collaborate on medium-term renovations of the guest rooms, bathrooms, public spaces, and building systems to enhance the hotel's value further. These improvements are projected to result in a stabilized yield of around 8%. The sale is anticipated to close in Q1 2025.
Radisson Blu Tromsø is in good condition with a strong position in the market and has, with support from its international profile, good occupancy and averages rate. To maximize the long-term value, Pandox and Radisson Hotel Group plan to jointly renovate rooms, bathrooms, public areas, and technical installations in the medium term. After completed investments, the hotel is expected to generate a stabilised yield of approximately 8%. Closing is expected to take place in the first quarter of 2025.
The hotel features a restaurant, bar, and 13 meeting rooms, the largest of which can accommodate 650 people.
Colliers acted as broker in the transaction, while Thommessen assisted the seller as legal adviser.
Pandox currently owns three hotels in northern Norway: two in Bodø and one in Harstad.
