Swallow Hotels on target for 140 sites

Acquisition-hungry Swallow Hotels is set to reach 140 UK properties by the end of the year.

Chief executive Peter Gray remained confident the group would hit the target following the conclusion of a deal for six more Scottish properties worth £30m, including the Freedom of the Glen chain, the Carnoustie hotel, Gleddoch House hotel and Huntly Arms hotel in Aboyne.

Gray said the group's sale-and-leaseback model allowed the company to focus on buying properties and expanding rapidly and dismissed concerns that the group was growing too fast.

"We're far from overextending," he said. "Early on we put the operational and financial infrastructure in place that would enable us to grow quickly into a large and successful chain of hotels. We currently have another eight hotels going through the legal process and are continuing to look at other venues throughout the UK."

But an industry source warned: "Swallow has gone down the sale-and-leaseback route when most deals are erring towards sale-and-manage-back, which has a different risk profile.

"Swallow runs the risk of exposure if the market declined, because of its highly leveraged leaseback deals."

By Emily Manson

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