Safestay PLC Acquisition (4968T)
November 15 2019 - 2:00AM
UK Regulatory
TIDMSSTY
RNS Number : 4968T
Safestay PLC
15 November 2019
15 November 2019
Safestay plc
("Safestay", the "Company" or the "Group")
Berlin Acquisition Expands European Hostel Network to 18
Safestay (AIM: SSTY), the owner and operator of an international
brand of contemporary hostels, is pleased to announce that it has
acquired the Hotel Auberge in central Berlin for EUR1.2 million.
Currently operating as a 32 bedroom hotel, the Hotel Auberge is
ideally suited to being converted into a modern 150 bed Safestay
Hostel.
Commenting on the acquisition, Larry Lipman, Chairman of
Safestay, "Berlin is a key tourist city which attracts around 13.5
million visitors each year and the hotel benefits from a desirable
position in the centre of the town, which makes it a perfect fit
for our portfolio of premium hostels. Acquiring existing leaseholds
enables us to expand our reach more rapidly throughout Europe and
gives us operating platforms which are immediately cash accretive.
It also complements recent freehold acquisitions in Pisa, Glasgow
and Venice. Our experience of converting small hotels to hostels
makes us confident of being able to quickly release the potential
of this site and deliver revenue growth.
Our operational success confirms we have established the
Safestay model as the right one for our guests, and our focus is
now firmly on expanding our network and making Safestay one of the
largest hostel operators in Europe."
Network Expansion in 2019
Already In 2019 we have increased our network by a third and the
Group is on track to meet its target of having 20 hostels by 2020.
The acquisition of Hotel Auberge is the fifth transaction the Group
has made in the last 5 months:
-- June acquired 161 bed Safestay hostel in Pisa
-- October acquired Glasgow hotel to be converted into 200 bed Safestay hostel
-- September entered a contract to acquire site to develop a 660 bed Safestay hostel in Venice
-- October announced the acquisition of 150 bed hostel in Athens to open in January 2020
-- November acquired Berlin hotel to be converted into a 150 bed Safestay hostel
With 18 hostels, Safestay is now able to offer customers a
network of European cities in which to stay. Alongside the
increased customer appeal, the scale of the network is attracting
the attention of leisure and travel operators seeking to combine
with Safestay to offer complementary services to our guests.
Hotel Auberge (Safestay Berlin)
Located close to Berlin's famous zoo near the centre of the
city, Hotel Auberge is a natural base from which to explore this
famous City and therefore an excellent site for a premium hostel.
Conversion from a 32 bed hotel into a 150 bed contemporary Safestay
hostel will be completed during the first quarter of 2020. The
transition into a hostel is expected to transform the earnings
potential of the site and it will immediately benefit from being a
part of the fast-growing Safestay network.
In the 12 months to 31 December 2018, Hotel Auberge generated
revenues of EUR0.8 million and EBITDA of EUR0.15 million. The
consideration before transaction costs, which is also the value of
the assets being acquired, is EUR1.2 million and will be satisfied
in cash from the Group's existing resources. The site will be
operated under an 11 year lease.
Safestay Network
Region Location Beds Leasehold/
Freehold
============================= ====================
UK Edinburgh 607 Finance lease
=================== ============================= ==================== ==============
York 147 Freehold
=================== ============================= ==================== ==============
Elephant and Castle (London) 486 Finance lease
============================= ==================== ==============
Kensington Holland Park 319 Finance lease
(London)
=================== ============================= ==================== ==============
Europe Berlin *70 Leasehold
=================== ============================= ==================== ==============
Brussels *88 Leasehold
=================== ============================= ==================== ==============
Lisbon 150 Leasehold
============================= ==================== ==============
Madrid 228 Leasehold
============================= ==================== ==============
Pisa 161 Freehold
============================= ==================== ==============
Prague 150 Leasehold
============================= ==================== ==============
Vienna *107 Leasehold
============================= ==================== ==============
Glasgow *110 Freehold
============================= ==================== ==============
Passeig de Gràcia 380 Leasehold
(Barcelona)
============================= ==================== ==============
Gothic Quarter (Barcelona) 132 Leasehold
============================= ==================== ==============
Sea (Barcelona) 96 Leasehold
=================== ============================= ==================== ==============
Subtotal 15 3,231
=================== ============================= ==================== ==============
Under Development Athens 150 (Q1 2020) Leasehold
=================== ============================= ==================== ==============
Paris 246 (2020) Leasehold
=================== ============================= ==================== ==============
Venice 660 (2022) Freehold (JV)
=================== ============================= ==================== ==============
Total 18 4,287
=================== ============================= ==================== ==============
*Vienna, Brussels, Glasgow and Berlin will be converted to
hostels in Q1 2020 adding 300 beds to the portfolio
Larry Lipman, Chairman of Safestay, said, "The business has good
momentum across all fronts. Our pipeline of new sites is strong
with further transactions likely to complete in the near term and
the advantages of our increased scale showing in the performance of
the operating business."
Enquiries
Safestay plc +44 (0) 20 8815 1600
Larry Lipman
Canaccord Genuity Limited
(Nominated Adviser and Broker) +44 (0) 20 7523 8000
Bobbie Hilliam
Novella +44 (0) 20 3151 7008
Tim Robertson
Fergus Young
For more information visit our:
Website www.safestay.com
Vox Markets page
https://www.voxmarkets.co.uk/company/SSTY/news/
Instagram page www.instagram.com/safestayhostels/
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END
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