Acquisition of Park Inn Loan Portfolio for c. £61.5m
Kennedy Wilson Europe Real Estate Plc, an LSE listed property company (LSE: KWE) that invests in direct real estate and real estate loans in Europe, announces that it has recently completed the acquisition of eight loans secured by first ranking mortgages over eight Park Inn hotels across the UK from two financial institutions. The purchase price for the loans is c. £61.5 million, reflecting a gross yield on cost of 9.3%. The acquisition will be funded from the Company’s cash resources.
The borrowers acquired the portfolio of hotels in 2006 and 2007 for £131.5 million and the total claim at completion on 16 February 2015 was £99.8 million.
The portfolio includes seven Park Inn hotels in England (Northampton, Lakeside, Telford, Bedford, Harlow, Birmingham West and Nottingham) and one in Wales (Cardiff) totalling 1,107 rooms. The hotels are leased to Rezidor Hotel Group (“Rezidor”) until 2030 (WAULT 15.7 years).
Rezidor is a Nasdaq OMX Stockholm exchange listed hospitality business, majority owned by Carlson. It owns the Park Inn and Radisson hotel brands and the eight Park Inn hotels form part of larger Park Inn portfolio of 19 hotels in the UK and 155 globally.
Mary Ricks, President and CEO of Kennedy Wilson Europe, commented:
“The purchase of the Park Inn loans is a classic KWE deal that capitalises on the synergies between our real estate debt and property professionals. This transaction gives us further exposure to the fast improving UK hospitality sector and a high quality covenant that we look forward to actively engaging with to identify various resolution strategies and asset management opportunities to enhance the value of our investment.”