Investment Firm Snaps up Holiday Inn York City in £15m Deal

Date: May 2018

Location: York, two miles from the city-centre, next to York Racecourse, UK

Name: Holiday Inn York  – Three star

No. of Keys: 148, 2.9 acre site with 160 space car-park

Seller: Quidnet Capital and Colony NorthStar. They appointed CBRE to handle the sale.

Quidnet has been involved in over £2 billion of real estate acquisitions and disposals and are currently managing in excess of £500 million of UK real estate.

In 2014 Quidnet sourced and acquired a £94 million multi sector portfolio (Silverbird) of 25 properties across the UK from RBS.

This acquisition was for a US real estate group and exchanged in just 12 days.

In January 2015 Quidnet acquired Astral Towers in Crawley for just under £20m and later that year a £311m portfolio of 24 assets from receivers acting for a syndicate of banks.

Colony NorthStar was formed through a tri-party merger between Colony Capital, Inc.  NorthStar Asset Management Group Inc. and NorthStar Realty Finance Corp. in 2017.

Colony has a hospitality vertical…their hotel portfolio is geographically diverse and is primarily comprised of extended-stay hotels and premium branded select service hotels located in major metropolitan and corporate suburban markets.

Colony tapped into the commercial mortgage bond market to refinance a portfolio of 135 hotels totalling 12,474 keys, in November 2017.

The portfolio consists of 41 extended-stay properties (39.7%), 72 limited-service properties (32.2%), 16 select-service properties (16.5%) and six full-service properties (11.5%) located in 68 different metropolitan statistical areas in 28 states.

The properties are operated under 20 national flags, and the five largest flags by portfolio balance are Residence Inn (29 properties), Courtyard (16) Fairfield Inn (31) Hampton Inn (14) and Homewood Suites (9).

Alongside the Public Investment Fund of Saudi Arabia, Singapore’s GIC Private, Credit Agricole Assurances and Amundi, they were also buyers in the recent AccorInvest US$5.3bn deal.

Buyer: Rockspring Property Investment Managers, a Patrizia company (acquired in December 2017), has acquired the Holiday Inn, York City, which is leased on a 50-year term by Kew Green – one of the leading hotel operators in the UK who fully renovated the hotel’s bedrooms between 2015 and 2017.

Rockspring said: “Due to its popularity as a tourist destination and the demand / supply imbalance of hotel accommodation, York has the fourth highest RevPar in the UK.

Gerald Eve advised Rockspring.

At December 2017 Rockspring had €8bn of assets under management representing a 150% increase in AUM since the March 2004 MBO.

This growth has been driven by the performance of our assets, the organic growth of our ‘flagship’ open-ended funds as a result of the growing interest of domestic and international (non-UK) investors, and the successful launch of a number of new closed-ended limited partnerships.

Retail accounts for 50% of their assets with 25% office…and 36% in the UK, 33% in Germany with the rest spread over 10 countries in Europe.

The acquisition accords with the funds strategy of reducing risk with a long lease, good tenant and strong location, whilst gaining access to an ‘alternative’ sector.”

Jamie Younger, head of UK Transactions at Rockspring, said: “These transactions demonstrate our highly selective approach to stock picking, which is underpinned by in depth research on the fundamentals of each asset.

Each of the acquisitions is located in performing locations with income growth potential, either through asset management or performance linked, long-term leases.”

They acquired the Walnuts Shopping Centre in Orpington, Kent in November 2015, which gave them a 63 room Premier Inn and they own a further 123 room Premier Inn in St Albans.

Price: £15.3m

Price per Key: £103,378

THPT Comment: Once again two giants in the property world go for a relatively small-beer deal in UK’s city of York…do we think this is a springboard for more activity in hotels for Rockspring?

First Seen: The Business Desk