Swedish hospitality company Pandox has entered into an agreement to acquire the 146-bedroom Adagio Aparthotel Edinburgh for £40.5m from property investor MAS.
The total transaction value will include transfer tax and will be financed by cash and existing credit facilities. Pandox expects the hotel to contribute approximately £2.2m in net operating income per year in a normalised market.
The transaction has been made in the form of acquisition of assets and liabilities, including the property and an existing revenue-based lease with minimum guaranteed rent and a remaining term of 15 years. The hotel property also has four additional small tenants.
The hotel was built in 2016 as part of a city development project.
Liia Nõu, chief executive of Pandox, said: "We are very pleased to acquire Adagio Aparthotel Edinburgh. It is an attractive hotel property in an exciting segment in a dynamic and expanding city. The hotel is strategically and centrally located in one of the most attractive hotel markets in the UK with well-diversified demand and very good revpar levels. The acquisition provides exposure towards the extended-stay segment, which we hope will grow over time as part of our portfolio."
Pandox owns hotels in Northern Europe with a focus on sizeable properties in key leisure and corporate destinations. The group's hotel property portfolio comprises 157 hotels with approximately 35,500 hotel rooms in 15 countries, including the Radisson Blu Glasgow, Manchester's Midland hotel, two Hilton-branded hotels at London Heathrow Airport and 17 Jurys Inn hotels across the UK.