Fri, 24 Sep 2021 | BUSINESS SALE
AGO Hotels has acquired the freehold interest in two Ibis hotels in South Wales, expanding its UK portfolio to 12 sites. The value of the acquisitions was not disclosed and the two hotels will continue to operate under their current brands post-acquisition, while switching to AGO’s hybrid lease model.
AGO Hotels launched last year, with its hybrid lease model offering hotel landlords the combination of guaranteed rent and participation in profits. Since launching, the group has acquired hotels in Dundee, Peterhead Glasgow, Bromley, Bromsgrove, Burton-upon-Trent, Lancaster, Portishead and Stansted.
The acquisitions in South Wales come at a resurgent time for the hotel sector as business travel resumes and holidaymakers increasingly turn to UK-based “staycations” as a result of COVID-19-related travel restrictions. These factors, along with the financial hit that many operators suffered during COVID-19 lockdowns, is spurring dealmaking activity in the sector.
Reflecting this resurgence, AGO has revealed that it saw a 29.5 per cent increase in occupancy in Scotland and England during July, followed by a 17 per cent increase in August.
The acquisitions of Ibis’s 99-bedroom Swansea hotel and its 104-bedroom budget location in Newport mark the company’s entrance into the Welsh market and increase the number of rooms in its portfolio by close to 40 per cent.
AGO Hotels co-founder Lionel Benjamin said: “We are delighted to announce the addition of these outstanding economy hotels in South Wales. Since launching last year, we have experienced rapid growth with 12 hotels now choosing to switch to our platform. We are expecting this number to continue to grow significantly over the next 12 months, as with the addition of more comfortable and affordable hotels across the UK.”
Benjamin’s fellow AGO co-founder Viv Watts added: “We are continuing to see widespread interest in AGO’s hybrid lease structure which benefits landlords both in valuation and yield terms, and we are looking forward to growing into new communities and engaging new asset owners with our distinctive offer of downside protection and genuine profit participation, having paid rents in full throughout the lockdown.”
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