Principal to buy chesford grange

By Dominic Walsh

Principal Hotels is to purchase the Chesford Grange Hotel at Kenilworth, Warwickshire, for about £7m and is close to agreeing a second acquisition.

The 130-bedroom Chesford Grange, once part of the ill-fated Baron Hotels group, has been managed by Periquito Hotels on behalf of receivers at Arthur Andersen since 1991.

Principal managing director Tony Troy said the first thing he would do once the deal was completed - contracts were exchanged last week - would be to remove the distinctive Periquito branding and refurbish the public areas and some bedrooms.

The property also has planning consent for a further 76 bedrooms and leisure facilities, and Mr Troy said the group planned to spend £1m during the next 12 months in a building programme to add 20 bedrooms and a leisure centre.

He declined to comment on the purchase price for the hotel, though it is understood to have fetched well over agent Christie & Co's £6.75m guide price.

Others who looked at the property expressed surprise at the figure being paid, though Mr Troy was adamant it was money well spent. "It is one of the largest conference and banqueting facilities in the Midlands and sits in one of the best locations in the region," he said.

In addition to a ballroom with capacity for 800 people, it has several smaller meeting rooms, a nightclub and is set in 17 acres of grounds about five minutes from the M40 motorway.

Mr Troy said negotiations were also at an advanced stage for an unnamed second property, which he hoped to announce in the next few days.

The completion of the two acquisitions, coupled with the opening last week of Bewley's Hotel in Dublin, will bring Principal up to a total of 21 hotels with total turnover of about £50m.

In the five months to the end of July, the group saw a 6% rise in sales on the same period last year and a 16% jump in operating profits. Average room rates were 8% ahead, while occupancy was broadly the same.