Hilton looks for further sale-and-leasebacks
10 July 2001
Hilton Group is looking at disposing of five of its UK hotels under a sale-and-leaseback agreement. The proposal, which is believed to value the as-yet-unnamed hotels at £200m, would see Hilton selling the hotels, probably to a bank or other financial institution, and then continuing to run them under long-term leases. In March, Hilton struck a similar deal with Royal Bank of Scotland (RBS), selling 11 of its hotels sold for £312m in cash. The attraction of such deals for Hilton is that they free capital that can be used for expanding the business, while allowing the chain to continue to operate the hotels. "We said at the time of the RBS deal this was probably not going to be the first or the last and that we would be looking at further opportunities," said a spokeswoman for Hilton. "We have put together a prospectus containing details of a number of properties, which has been sent out to test the market and what the interest is in the marketplace. "Other than that, I cannot comment on the value of it or the hotels," she added. March's deal saw Hilton agree a 20-year lease for nine of the hotels, with two options to extend for 10 years at a time. For the other two, the Hilton Hyde Park and Glasgow Hilton, the initial term was 30 years, with a 10-year option to extend.
