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The Lowry Hotel in Manchester was purchased for £52.9 million (Image: The Lowry Hotel Limited).
The trustee-manager of CDL Hospitality Business Trust (CDLHT) has acquired a five-star luxury hotel in Manchester by way of acquiring the entire issued share capital of The Lowry Hotel Limited for £52.9 million (S$94.7 million).
The purchase price is based on the £52.5 million property price and £0.4 million payment based on The Lowry Hotel Limited’s estimated net working capital and cash.
Notably, The Lowry Hotel Limited will continue to hold and operate the hotel even after the completion of the acquisition.
“Assuming CDLHT owned the property from 1 January 2016, the pro forma net property income yield of the property for FY 2016 would be 7.3 percent, based on the property price of £52.5 million. On a pro forma basis for FY 2016, this translates to a DPS accretion of 2.7 percent,” noted the trust’s managers.
Situated near the heart of Manchester city centre, the 165-room hotel offers a comprehensive suite of facilities. Well known throughout UK, the hotel registered a revenue per available room growth of 6.9 percent year-on-year in 2016.
“This acquisition in Manchester reinforces our strategy to invest in markets with robust medium to long-term growth potential,” said Vincent Yeo, chief executive officer of the trust’s managers.
“Manchester is one of the most important cities outside of London with a buoyant economic outlook, and the hospitality market is supported by a strong mix of corporate and leisure demand, particularly in football-related and entertainment demand, which features prominently for the property.”
He added that the acquisition provided the trust with the unique opportunity “to acquire an iconic asset while capitalising on a low funding environment”.
This article was edited by Denise Djong.
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