7 June
2024
Safestay
plc
("Safestay", the
"Company" or the "Group")
Acquisition of Central
Property in Brighton
to be converted into a
220 bed Premium Hostel
Safestay (AIM: SSTY), the owner and
operator of an international brand of contemporary hostels, is
pleased to announce the acquisition of a freehold property in the
centre of Brighton, from the University of East Sussex, by Safe
Hostels Ltd, a 100% owned subsidiary of and guaranteed by Safestay
Plc, with the intention of converting it into a 220-bed hostel. As
part of the completion process, the charges on the property will be
satisfied as the sale is conditional on this.
The Group is expanding and this
purchase follows the acquisition last month of a 100 bed hostel in
Cordoba, Spain, the signing of a management contract to run the
resort-based 120 bed Calpe Seafront Hostel in Spain in April and
the acquisition of a 225 bed hostel in Edinburgh in October last
year.
The building is an attractive Grade
II listed end of terrace property located in the heart of Brighton
just 600m from the seafront. Set over five storeys and totalling
15,285 sq ft, the building is currently vacant. Upon completion,
the Group will seek planning permission to convert the
regency-style building into a hostel offering 220 beds, 200 of
which will be in dormitory style accommodation and 20 in private
rooms.
The additional cost of conversion is
estimated at £1 million and should take approximately six months.
In its first year of trading, sales and EBITDA are projected to be
£750,000 and £250,000 respectively.
Safestay Brighton will be the
Company's sixth hostel in the UK and the twentieth for the Group as
a whole. A popular tourist destination, Brighton is an easy journey
from London, and has been described as the UK's "hippest city",
attracting over 11 million visitors per year. The hostel is ideally
situated, opposite the Royal Pavilion, a former regency palace and
one of Brighton's most popular tourist destinations. It is also
within close range of The Lanes, the city centre's shopping and
leisure district.
There is currently a lack of budget
tourist accommodation on offer in the city, providing an
opportunity for Safestay to fill a gap in the market with its
premium hostel offer.
The total acquisition consideration is £2.275
million and will be funded by the Group's existing cash resources
and a new £1.2 million loan from the trustees of the Sheldon
Pension Fund and Sentpark Capital Limited. The loan interest rate
is 1% per month and is serviced monthly with a repayment date of 18
months after the drawdown date or earlier, subject to the one year
minimum interest period.
Larry Lipman, Chairman of Safestay, said,
"I am delighted to announce this acquisition. It
is a unique building and ideally suited to becoming a premium
Safestay hostel. Brighton has an excellent reputation in the UK as
both a seaside getaway and a lively cultural hub, and there is
growing demand for affordable tourist accommodation in the city.
Safestay will help fill this gap in the market by offering premium
hostel stays for visitors, in a grand property, at a low cost. I am
confident that this will be another strong addition to our
portfolio."
Enquiries:
Safestay
plc
Tel: +44 (0) 20 8815 1600
Larry Lipman
Liberum (Nomad
& Joint Broker)
Tel: +44
(0) 20 3100 2000
Andrew Godber / Edward Thomas / Josh
Borlant
Novella
Tel: +44 (0) 20 3151 7008
Tim Robertson / Safia Colebrook
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/