Johannesburg - Hotel and leisure-focused property investment firm, International Hotel Group Limited (IHL), has completed the acquisition of two Holiday Inn Express hotels in Redditch and Southampton in the UK for £26 million (R552m) plus costs.
The group owns eight hotels in the UK and has a primary listing on the Euro MTF market of the Luxembourg Stock Exchange and a secondary listing on the JSE’s AltX.
Both the 100-bedroom Holiday Inn Express Redditch and 176-bedroom Holiday Inn Express Southampton are freehold properties and have new 20-year franchise agreements with InterContinental Hotels Group.
The Holiday Inn Express Redditch was acquired for £7m plus costs and had an occupancy last year of 75 percent, while the Holiday Inn Express Southampton was purchased for £19m plus costs and had an occupancy of 84 percent last year. The purchase price was partly settled through the proceeds of the £7m private placement as announced by IHL last month, with the balance of the purchase price of £19m funded through existing cash resources and senior bank debt funding.
Helder Pereira, IHL’s chief executive, said yesterday that the successful “off-market” acquisition of these hotels further underpinned IHL’s ability and reputation to source, acquire and fund hotel transactions within the competitive UK hotel sector, while delivering on its core investment and acquisition strategy.
Pereira said IHL was in negotiations to conclude a further acquisition, details of which would be announced in due course. Jon Colley, IHL’s chief information officer, said while both hotels were mature businesses in stable markets, they believed that there was still growth potential.
“The UK regional hotel market is still experiencing record occupancy rates and this is forecast to continue for the rest of 2016,” he said.
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