The new owner of Malmaison and Hotel du Vin is on the verge of expanding the two brands with the acquisition of a small portfolio of properties.
Frasers Hospitality UK, which paid KSL Capital Partners £363.4m for the two brands three months ago, intends that the additional hotels will be the first of a number of future acquisitions which will help grow the two brands to a total of 50 properties.
Future growth will primarily be through the acquisition of properties with around 100-bedrooms for Malmaison and up to 60-bedrooms for Hotel du Vin. Management contracts will also be considered.
Guus Bakker (pictured), chief executive of Frasers Hospitality UK - a subsidiary of Singapore-based property firm Frasers Centrepoint Limited - said the addition of Malmaison and Hotel du Vin perfectly complemented its existing UK portfolio of serviced apartments and extended-stay properties in London, Edinburgh and Glasgow. In the UK the company owns and operates five Fraser Residences, four Fraser Suites, and one Fraser Place, in addition to the Best Western the Cromwell and the Park International hotels. Worldwide, the group operates a total of 129 properties.
"We had been keen for some time to expand our presence within the UK and although we didn't specifically target Malmaison and Hotel du Vin, when the opportunity arose to buy them, we were keen to make an offer," said Dutch-born Bakker.
He explained that the high price Frasers paid for the two brands - around £163m more than US- based private equity company KSL paid in 2013 - reflected the high returns the hotels command.
"The average daily rates and total revenue per room they achieve tend to be around 50% higher than their competitor set, with food and beverage being a very important part of the business," explained Bakker. "This is driven by the very strong positioning and reputation both brands have within the market."
An extensive CAPEX programme is currently being finalised to allow the renovation of some of those properties which failed to receive the attention they deserved during the recession, even though KSL ploughed around £25m into improvements across the two portfolios.
Beyond the UK, Bakker said that Frasers intends to expand both Malmaison and Hotel du Vin into Europe, with the northern countries of Scandinavia, Benelux, Germany and Switzerland being particular target markets. "We believe the culture of these countries will accept the brands more readily than countries in southern Europe."
There are also plans to introduce Malmaison and Hotel du Vin into Australia, China and South-east Asia. While it is believed there will be little change to the existing brand concepts for Australia, it is expected that there will need to be an adaption of the food and beverage offer for China.
Baaker said that while KSL had an exit strategy from the outset of its ownership of the two brands, Frasers' investment was for "the long-term".
Operationally, Paul Roberts heads the two brands as chief executive, while Scott Harper and Nick Halliday are chief operating officer respectively for Malmaison and Hotel du Vin.
Both brands were founded in 1994: Malmaison by Ken McCulloch and Hotel du Vin by Robin Hutson and Gerard Basset. The two groups came together in 2004 when Hutson and Basset sold Hotel du Vin to Malmaison's then owner MWB.
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