The manager of CDL Hospitality Trusts (CDLHT) says it has completed the indirect acquisition of Hotel Brooklyn in the UK, on Feb 22.
Hotel Brooklyn is a newly-opened upscale four-style hotel in Manchester, on 57 and 59 Portland Street. It has a total of 189 keys.
The acquisition was made by CDL Hospitality REIT’s wholly-owned subsidiary, CDL HREIT Investments (II), who entered into a share purchase agreement (SPA) with the RAHoldingsUK on the same day.
Under the SPA, CDLHT will acquire 100% of the shares of Roundapple Hotel Partners III Limited, which currently holds Hotel Brooklyn, from RAHoldingsUK.
The total cost of the acquisition is estimated to come up to £24.1 million ($43.8 million), which comprises the property consideration of £22.8 million, an acquisition fee of £0.2 million as well as an estimated stamp duty and other fees of £1.1 million.
Roundapple Hotel Partners III’s net asset value stands at £4.4 million, which takes into account the hotel’s agreed value of GBP22.8 million, bank and shareholder’s loan amounts of £18.0 million and adjusted for estimated negative net working capital of £0.4 million as at the time of the completion.
See also: Changes in ICR, leverage to come into effect immediately, with additional disclosures in March
The acquisition is expected to be accretive to CDLHT’s stapled security holders.
Based on the property consideration and net property income (NPI) of £1.7 million, the NPI yield of the property is 7.4%. On a pro forma basis for the FY2021 ended December, this translates to a distribution per stapled security (DPS) accretion of 1.1%.
Units in CDLHT closed flat at $1.22 on Feb 21.
Photo: CDLHT
