Pandox has Bought Three Dorint German Hotels in a €103m Deal

Main Photo: The Dorint Hotel an den Westfalenhallen

Date: June 2019

Location: Dortmund, Augsburg and Erfurt, Germany

Name: Dorint Hotel an den Westfalenhallen, Dorint Hotel an der Kongresshalle and Dorint Hotel am Dom

No. of Keys: 565

Seller: HR Group, an owner managed company founded in 2008. Since then HR Group has become one of the fastest growing hotel owner-operator companies within Central Europe and one of the leading hotel operators in Germany. Today, the group’s portfolio stands at 34 properties with more than 4,800 keys in Germany, the Netherlands and Spain. As part of its growth strategy, HR Group cooperates with partners such as AccorHotels, Wyndham Hotels & Resorts, Hyatt Hotels & Resorts and Dorint Hotels & Resorts.

Buyer: Pandox has bought three hotels in Germany, in a €103m deal. The Dorint branded properties in Dortmund, Augsburg and Erfurt, will continue to be managed by seller HR Group.

Pandox is a leading owner of hotel properties in Northern Europe with a focus on sizeable hotels in key leisure and corporate destinations. Pandox’s hotel property portfolio currently comprises 144 hotels with approximately 32,300 hotel rooms in 15 countries. Pandox was founded in 1995.

The pair have agreed 20-year revenue-based lease agreements on the properties. HR Group will retain a minority 5.1% stake in the hotels.

The acquisition is financed by existing credit facilities. For 2019 the hotels are expected to contribute approximately €5.5m in rental income and €5m in net operating income, on an annualised basis. The acquisition is expected to be closed during the third quarter 2019.

“The acquisition is industrially sound and contributes to a further diversification of Pandox’s portfolio both geographically and brand-wise. The hotel properties are in good locations in stable domestic cities in Germany and are mainly driven by domestic demand with a good balance between the business, meeting and leisure segments. The hotels are full-service hotels in the upper mid-scale segment with good guest ratings and an average size of 188 rooms.”, says Anders Nissen, CEO of Pandox.

“HR Group is very pleased to have Pandox AB as a strategic investor for the three hotel properties. The transaction marks a key-milestone in our company history and the start of a long-term partnership with one of the leading hotel property owners in Northern Europe. We’re delighted to continue with the operation of the three hotels and to strive for an excellent performance and guest experience with our teams. We look forward to further cooperation and to achieve mutual and continuous growth.”, says Ruslan Husry, CEO of HR Group.

The acquisition of the hotel properties is made by acquisition of shares in a company with an underlying property value of €103m on a debt free basis. The acquired hotel property portfolio has a yield of approximately 5.7 percent, before transaction costs.

The tenant has a far-reaching responsibility for maintenance, repair and investments in the properties.

Price: €103m

Price per Key: €182,301

THPT Comment: Great dea for both parties

First Seen: Pandox website

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