Main Photo: The new Maldron Hotel in Shoreditch, London
Date: September 2019
Location: Paul Street, Shoreditch, London, UK
Name: Maldron Hotel
No. of Keys: 140
Seller: Ocubis, a property development and management company whose CEO is Foxtons’ founder Jon Hunt, has sold a proposed hotel site it owned in Shoreditch, London.
CBRE and Capital Real Estate Partners advised Ocubis on the sale of the site. Lewis Corby, director, hotel brokerage and investment sales at CBRE, suggests that interest in the site was strong, He comments: “We received exceptional demand from domestic and international investors, demonstrating that despite any Brexit concerns, London is still one of the world’s leading hotel markets.”
Buyer: Dalala Hotels Group has bought the site on Paul Street complete with planning permission for a 140 bed hotel, reports say. The company paid £32m for the site and plan to invest a total of £60m including the land cost to build the hotel which will be operated under its Maldron brand. The development cost is being funded by operating cash flow.
According to the group’s half-year results for the period ended 30 June 2019, the Dalata reported revenue of €201.9m (£184.3m), an increase of 12.2% on the same period last year; as well as €37.8m (£34.5m) in pre-tax profits, a 6.7% increase; and €73.4m (£67m) in adjusted earnings before interest, tax, depreciation and amortisation (EBITDA), up 43.9%.
It credited the revenue increase to strong operational performance and growth from the new and extended hotels. Dalata has added 1,400 rooms to its portfolio over the last 18 months, including in Belfast, Newcastle and London.
A pipeline of around 2,4000 rooms is expected to be delivered between 2020 and 2022, with hotels planned for Bristol, Birmingham, London, two in Manchester and two in Glasgow, which the group explained would be a further significant driver of growth.
Dalata spent €8.8m (£8m) on refurbishments across its hotel portfolio in the first half of 2019. Like for like revenue per available room (revpar) increased 0.7% to €87.62 (£79.96) and Dalata described its UK revpar performance as “very strong”.
Pat McCann, Dalata Group chief executive, said: “Our hotels in all regions are performing well and I am particularly happy with the performance of our UK hotels given our exciting growth plans for the region.
“Despite the challenges of a significant increase in the VAT rate in Ireland and the ongoing uncertainty surrounding the timing and nature of Brexit, 2019 to date, as a whole has been another very successful year. The outlook for the balance of the year looks very positive. We are currently looking at a number of exciting opportunities in the UK and Ireland and we expect to announce further additions before the end of the year.”
Real estate advisor CBRE and Capital Real Estate Partners advised Ocubis on the sale of the development site.
Dalata Hotel Group was founded in August 2007. The group’s portfolio consists of 30 owned hotels, 10 leased hotels and three management contracts with a total of 9,046 bedrooms.
Price per Key: £428,571
THPT Comment: While there has been much talk of foreign buyers bagging Brexit bargains in London this, given the fact that Ocubis is a shrewd operator in the London market, is unlikely to be one of them. If anything it serves to confirm that the London commercial market is indeed still alive and well.
First Seen: The Caterer
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