Luxury hostel group Safestay has extended its presence in Europe with the acquisition of three properties from Equity Point Hostels, the owner and operator of seven properties.
The move follows hard on the heels of Safestay's announcement that it had bought the U Hostels portfolio of three leasehold properties in Madrid and Paris.
The new deal involves Safestay making an immediate payment to Equity Point, which owns and operates seven hostels in Europe, of €3.6m (£3.1m) in return for 90% of the company's share capital valued at around €10m (£8.7m). Safestay will eventually take over 100% of the operating lease of three hostels owned by Equity Point as redemption of the €3.6m (£3.1m) loan.
The portfolio of properties are being acquired by Safestay on operating leases to 2031 in Barcelona, Lisbon (2029) and Prague (2028), with automatic five-year renewal periods. The three hostels generated sales of €1.6m (£1.4m) and EBITDA of €400,000 (£349,000) for the financial year ended 31 December 2016.
Larry Lipman, chairman of Safestay, said: "The acquisition of these three sites, together with the U Hostels acquisition we announced earlier this month, means we have increased our portfolio from four to 10 hostels. Most importantly, however, we have acquired sites in excellent locations, namely: Madrid, Barcelona, Paris, Prague and Lisbon. A strong line up and a natural fit with our existing sites in London, York and Edinburgh.
"These three hostels, being already operational, will immediately add to our operating platform and significantly enhance our overall offer. We look forward to completing the transaction and integrating the new sties into the enlarged Safestay business."
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