Action Hotels PLC Acquisition of ibis Budget hotel at Melbourne (7923R)
July 01 2015 - 2:00AM
UK Regulatory
TIDMAHCG
RNS Number : 7923R
Action Hotels PLC
01 July 2015
01 July 2015
Action Hotels PLC
("Action Hotels", "Action", the "Group" or the "Company")
Acquisition of ibis Budget hotel at Melbourne Airport
Action Hotels, the leading owner, developer and asset manager of
branded three and four-star hotels in the Middle East and
Australia, is pleased to announce that it has agreed to acquire the
business and assets of the 73 room ibis Budget hotel at Melbourne
Airport, Australia, for $8.8m (the "Acquisition").
The Acquisition will be the seventh ibis branded hotel in the
Group's operating portfolio, and the second ibis hotel the Group
owns and operates in Melbourne, Australia. During the year ended 31
December 2014 the hotel averaged 89.8% occupancy and contributed
EBITDA of US$1m. The Acquisition will be immediately earnings
enhancing for the year ending 31 December 2015 and thereafter. The
Acquisition also brings with it the opportunity to develop or
further extend the existing hotel on the acquired land in the
future.
The newly renovated hotel and its accompanying 3,697m(2) of land
is located in a prime position within the Melbourne Airport
precinct, 300 metres from the terminal buildings. Melbourne is a
cultural and business hub in Australia and is recognised as a
well-established tourist and business destination. The hotel market
in Melbourne has performed strongly in the last decade. Melbourne
airport has a 20 year expansion program in place, investing some
AUS10bn to boost its capacity and absorb the ongoing growth in
passengers, with a new 20,000m(2) terminal due to open in 2015
which will host regional airlines Jetstar, Tigerair, and Regional
Express (source: Melbourne Airport Management).
The $8.8m cash consideration will be funded US$3.7m from
existing cash resources available within the Group and the
remainder through debt secured on the hotel property provided by St
Georges Bank, the current lender on the property, at a fixed rate
of 4.99% per annum for five years to 2020. The hotel is built on
land owned by Melbourne Airport Authority and is leased until June
2047. The ground rent is indexed annually with the next rent review
due in 2022. Action Hotels will continue to operate the hotel under
the ibis budget brand for a period of 20 years, with an option to
extend. Completion of the Acquisition is expected to occur within
90 days of this announcement.
The addition of ibis Melbourne Airport brings Action Hotels'
operating hotels to nine and 1,561 rooms. In addition, Action
Hotels has a fully funded development pipeline of nine hotels and a
further 1,512 rooms, taking the total operating and committed
pipeline hotels to 3,327 rooms, a 60% increase from December
2013.
Sheikh Mubarak Al Sabah, founder and Chairman of Action Hotels
stated,
"We have secured this strongly performing hotel asset in an
attractive market at an attractive price and the operational
performance of this hotel will immediately contribute to our Group
profitability. The acquisition will further benefit from the
ability to leverage our increased scale of operations in Australia
whilst providing strategic optionality in the region.
"I am pleased to add an operational hotel direct into the
portfolio where we will see immediate contribution to our
profitability. I am also delighted to be partnering once again with
Accor demonstrating the strength or our relationship with the
leading global hotel operator."
Commenting on the new development Simon McGrath, Accor Middle
East Chief Operating Officer said,
"We are delighted to be partnering with Action Hotels on the
ibis Budget Melbourne Airport. Our excellent relationship with
Action Hotels within Australia and the Middle East continues to
grow and we are excited about the up and coming 368 room ibis
Elizabeth Street Brisbane, which will be the largest ibis branded
hotel in Australia. This will take the number of hotels that we
manage on behalf of Action Hotels in Australia to three with 596
rooms."
For more information contact:
Action Hotels PLC Tel: +44 (0) 20
7907 9663
Alain Debare, Chief Executive
Officer
Katie Shelton, Director of
Corporate Affairs
Investec Bank plc (NOMAD Tel: +44 (0) 20
& Broker) 7597 4000
Chris Treneman / David Anderson
/ Josh Levy
Camarco (Press enquiries) Tel: +44 (0) 20
3757 4980
Billy Clegg/ Jennifer Renwick/
Tom Huddart
Notes to Editors
Action Hotels PLC
Action Hotels is a leading owner, developer and asset manager of
branded three and four star hotels in the Middle East and
Australia. Established in 2005, Action Hotels currently operates
eight hotels with 1,488 rooms in aggregate across the Middle East
and Australia, with further properties in development in both
regions.
More information is available at
http://www.actionhotels.com/
Notes
The exchange rate used for conversion was 1USD = 1.3004 AUD
This information is provided by RNS
The company news service from the London Stock Exchange
END
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