Room2 completes sale and leaseback of flagship Southampton property
‘Hometel' brand Room2 has completed the sale and leaseback of its flagship Southampton site to a fund managed by Aberdeen Standard Investments for around £10m.
The proceeds of the disposal are earmarked for reinvestment into acquisition opportunities, with Room2 on track to deliver 5,000 keys by 2030.
The concept, a sub-sector of the extended stay space, was the brainchild of brothers Robert and Stuart Godwin, former members of the British Olympic Development Sailing Team.
Constructed in 2018, Room2 Southampton has 71 studio bedrooms with kitchenettes, a ground floor café and cocktail bar, as well as meeting room and event spaces and a fitness studio.
The group said the business model has proved resilient during the pandemic, remaining profitable with both Room2 Southampton and Hammersmith continuing to trade with monthly occupancy rate of around 70% last year.
Room2 was advised by Savills and Aberdeen Standard Investments was advised by Knight Frank.
James Dunne, head of transactions at Aberdeen Standard Investments, said: "The Room2 platform in the extended stay market has demonstrated its resilience through an unprecedented period of disruption. The ability to pivot between long- and short-stay augments the lean operational model without compromising on service. This not only protects business in a downturn but, as importantly, should allow for future outperformance with the quality facilities and flexibility of the product being attractive to both business and leisure travellers when markets normalise.
"We are pleased to be joining the Room2 journey and look forward to a successful long-term relationship."
Robert Godwin, managing director at Lamington Group, the family-owned real estate investment and development company behind Room2, said: "We hope this partnership will lead to further investment into more Room2s in the near future."
Richard Dawes, director in the hotel capital markets team at Savills, added: "This is an important step for the growth of the Room2 brand and a landmark transaction in the UK extended-stay sector.
"Securing one of the UK's leading institutional partners for Lamington Group, at pricing levels that reflect the robust performance of the asset through the pandemic, is a significant endorsement in both the platform's long-term prospects as well as the team behind it.
"The extended-stay sector has demonstrated its flexibility to adapt and perform resiliently over recent months and we expect this theme to continue and support the continued role out of what is a truly exciting concept."