UK – Property management company Pandox has agreed to acquire DoubleTree by Hilton Edinburgh City Centre in Scotland for around £49m (US$64m).
The transaction will be funded through available cash reserves and a new bank loan.
The 2014-refurbished DoubleTree by Hilton Edinburgh City Centre features 138 guest rooms, conference facilities, and a restaurant and bar.
Located near attractions such as the Royal Mile and Edinburgh Castle, the property claims to have strong occupancy rates.
Pandox anticipates an initial yield from the hotel exceeding 7.5%, which could increase to around 9% through operational upgrades and targeted investments.
Pandox will assess the hotel’s brand strategy and operational model before the existing franchise agreement, which expires in 2027.
The transaction is due to be completed in the fourth quarter of 2024, after which the hotel will join the company’s Own Operations business segment.
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“DoubleTree by Hilton Edinburgh City Centre is a nice addition to our hotel property portfolio. The hotel is performing well with the potential to develop the hotel product further and increase the return over time,” Pandox CEO Liia Nõu said.
“The cooperation with Axiom Hospitality, which will comprise nine hotels in the UK, ensures effective operations and lower operational risk.
“The transaction is a good example of our ability to identify and make acquisitions which contribute to our earnings short term while also laying the foundation for additional value creation long term.”
Pandox also owns Aparthotel Adagio Edinburgh Royal Mile in Edinburgh.
Pandox acquires three aparthotels
In related news, Pandox has completed the acquisition of three Residence Inn by Marriott apart-hotels in central London, UK, for £230 million (US$300.97m), representing a 7% yield.
The aparthotels have been bought from Starwood Capital and comprise 503 rooms.
Pandox said the hotels are expected to contribute approximately £34 million (US$44.49m) in revenues and approximately £17 million (US$22.25m) in net operating income annually.
Axiom Hospitality operates the hotels under a management agreement. Available cash funds and a new green bank loan finance the acquisition.
The hotels are Residence Inn by Marriott Kensington, Residence Inn by Marriott London Bridge and Residence Inn by Marriott Tower Bridge.
The sellers are controlled affiliates of Starwood Capital with the hotels sold as freeholds.
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