Dalata buys long lease on new Aldgate hotel
Dalata Hotel Group has exchanged contracts to acquire the long leasehold interest of a hotel under development at Aldgate, London for a total consideration of £91m (€100m), it announced on Wednesday.
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The AIM-traded firm said that as part of the transaction, it would acquire the entire issued share capital of Hintergard from Aldgate Hotel Holdco - an investment vehicle of an international private equity real estate investor.
Hintergard owned the 300-year leasehold interest of the hotel under development, with the transaction remaining conditional on the completion of the hotel to an agreed specification.
The construction of the hotel, which would be branded ‘Clayton Hotel Aldgate London’, was expected to be completed and operational towards the end of this year.
Dalata said the hotel would have 212 rooms, with a restaurant, bar and access to a fitness centre.
It would be located adjacent to Aldgate East tube station, and in close proximity to the new Liverpool Street and Whitechapel stations on the Elizabeth line - both of which are scheduled to open in December.
The transaction would be funded by an additional debt facility which Dalata had secured from its existing banking partners.
“We are delighted to secure this new hotel in Aldgate, London,” said Dalata’s deputy chief executive officer Dermot Crowley.
“We already successfully operate two Clayton hotels in the Greater London area at Chiswick and Cricklewood.
“This new hotel gives us a presence in a key central location within the city and is ideally located for corporate customers who want to be close to the City of London and leisure guests visiting the many attractions that the city has to offer.”
Crowley said access to the Aldgate area would be “further enhanced” with the opening of two new Elizabeth line stations at Liverpool Street and Whitechapel in December.
“Although RevPARs have fallen slightly in London over the last 12 months, London remains a key gateway city in Europe that will continue to benefit from the growth in international travel.
“Our gearing levels will increase in the short term as a result of this transaction but will still remain below our guided upper level of 3.5x net debt-to-EBITDA.
“The hotel is projected to be earnings per share enhancing from its first year of operation.”
Crowley added that the announcement represented “another very important” milestone in the growth of Dalata in the UK.
“We now have a pipeline of almost 2,000 rooms across key UK cities such as London, Birmingham, Glasgow, Manchester and Bristol.”