Tristan Capital Takes Majority Stake in Point A Budget Hotels Platform for £420m
Main Photo: The Point A Hotel in Parnell Street, Dublin
Date: April 2022
Name: Point A Hotels
Locations: 10 hotels across the UK, mainly London, with three in Edinburgh, Glasgow & Dublin
Number of Keys: 1,520
Seller: Raag Hotels – a JV between the Jivraj family and the Wellcome Trust, who have sold their stake to Tristan
Buyer: Tristan Capital’s European Property Investors Special Opportunities 6 – EPISO 6
An opportunistic fund managed by Tristan Capital Partners has acquired a majority stake in a UK and Ireland budget hotel platform as part of a £420m deal.
Tristan Capital’s European Property Investors Special Opportunities 6 (EPISO 6) has acquired the shareholding in Raag Hotels, which owns 10 Point A Hotels branded hotels.
The Tristan fund will own the hotel platform alongside current minority shareholders, Queensway, a company associated with the Jivraj family, and a company owned by Naguib Kheraj as the Wellcome Trust sells its stake.
As part of the new partnership, Queensway will co-invest and act as hotel operator, asset manager and development partner for future sites.
Tristan said the shareholders have “committed significant additional equity to fund the next phase of growth” of Point A Hotels with the goal of doubling the size of the estate over the medium term.
The current portfolio comprises 1,520 rooms, with 80% of its value in London.
Early last year, Tristan appointed Luc Boschmans managing director of hospitality investments as part of its plan to target distressed hotel investments.
Kristian Smyth, an executive director in charge of investments at Tristan Capital Partners, said: “The acquisition of this hotel platform reflects our wider hotel strategy of partnering with best-in-class operators in market segments that are resilient to market volatility with substantial growth potential.
Smyth said all the hotels are situated in city centres within vibrant neighbourhoods, close to demand generators including business districts, tourist attractions and event venues.
“Our ambition is to materially grow the platform in the UK and Ireland alongside the Queensway team with 2-3 acquisitions per year with the objective of doubling the portfolio in the medium term,” Smyth said
Naushad Jivraj, Queensway’s CEO, said: “We are delighted to form this new partnership with Tristan Capital Partners’ fund to continue to significantly grow the Point A platform to provide consumers with a budget boutique offering, in great city-centre locations with personal and memorable service.
”Under the management of Queensway Hotels, the Point A Hotels brand has developed a high-quality product at great value, generating positive customer feedback resulting in strong occupancy levels.
“Wellcome Trust have been an excellent partner to work with over the past eight years and we are pleased that this transaction has produced a successful outcome for them.”
Lisha Patel, managing director, investment division at the Wellcome Trust said: “Our participation in the significant growth and evolution of the Raag Hotels business has produced strong returns over the life of our investment.
“The strength and quality of the Point A brand, the hotel portfolio and the Queensway management team attracted very keen interest from institutions to acquire our shareholding and we are confident the business will continue to perform well and deliver excellent guest experience under new ownership.”
Price: If £420m has been paid for Wellcome Trust’s 50% stake, this would value the whole at £840m – which at £552k a key seems to high….Will dig further!
THPT Comment: The Jivraj family have done well, with being easyHotel franchisees early on, changed the brand to Tune Hotels in 2013, after which they bought Wellcome Trust in as 50% partners, at which time they had 616 keys….. now more than doubled at 1,520
First Seen: IPE Real Assets
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