JSE-listed Redefine Properties International has acquired 60% of the issued shares in BNRI Earls Court from Camden Lock and Earls Court LLP for £8.7m, which complements the group’s existing portfolio of six high-quality hotels.
BNRI owns the 150-room Holiday Inn Express Hotel, valued at £27m, in Earls Court, London.
The remaining 40% shareholding in BNRI is held by Camden Lock and Earls Court LLP, which is controlled by Bashir Nathoo.
CEO Mike Watters said on Thursday that during the group’s recent £127.5m capital raising "we stated that we had identified a strong pipeline of acquisition opportunities, and this transaction represents the first of these".
"The limited-service hotel sector continues to thrive in pockets of London and, with our in-depth knowledge of the performance of this particular hotel and our belief in the potential of this sector, we believe this transaction illustrates a compelling investment opportunity that will deliver high-quality income to our investors," he said.
Mr Watters said Redefine International Hotels, a subsidiary of Redefine International, had been involved in the operational management of the hotel since December 2010 and had a "good" working knowledge of the business prior to the group’s investment.
The hotel formed part of the Splendid Hotel Portfolio, which consisted of seven hotels that were originally co-owned by Mr Nathoo, five of which were acquired by the group in December 2010.
Redefine said the hotel was partly funded by a debt facility of £12.5m from Aareal Bank AG for a term expiring in November 2015, at an all-in rate of 5.19%.
The hotel is located close to the Earls Court Exhibition Centre and arena and the Olympia Exhibition Centre. There are two meeting rooms for up to 50 delegates, a restaurant and bar, and 16 parking spaces.
It is held under freehold title and is subject to a franchise agreement with IHG Hotels until 2023.