Pandox has completed the acquisition of three Residence Inn by Marriott aparthotels in central London for £230 million, representing a 7% yield.
The aparthotels have been bought from Starwood Capital and comprise 503 rooms.
Pandox said initially the hotels are expected to contribute approximately £34 million in revenues and approximately £17 million in net operating income, on an annualised basis. The hotels areoperated by Axiom Hospitality under a management agreement. The acquisition is being financed by available cash funds and a new green bank loan.
The hotels are Residence Inn by Marriott Kensington, Residence Inn by Marriott London Bridge and Residence Inn by Marriott Tower Bridge.
The sellers are controlled affiliates of Starwood Capital with the hotels sold as freeholds.
Pandox already owns three hotels in the greater London area: Leonardo Hotel London Croydon (leases), Hilton London Heathrow Airport T4 (leases) and Hilton Garden Inn London Heathrow Airport (own operations) with a total of 1,002 rooms.
CBRE and JLL advised Starwood Capital.
CBRE said in a LinkedIn post on its account: "The completion of this sale comes amid a resurgent hotel investment market, which has largely been driven by stabilising interest rates and resilient trading performance. The UK’s hotel investment volumes have already surpassed the entirety of 2023 and it is predicted that London will benefit from record levels of overnight visits for 2024, further signalling the strength of the sector."
Liia Nõu, CEO of Pandox, said in a statement: “We are happy to have acquired three well-positioned freehold aparthotels in strong locations in central London, thereby increasing our exposure towards the attractive ‘extended-stay’ segment. The hotels are highly profitable, and the hotel products are well established in the market with strong distribution via Marriott International, which becomes a new cooperation partner to us."
Pandox owns 160 hotels with a total of approximately 35,500 rooms in 11 countries. It was founded in 1995 and has been listed on Nasdaq Stockholm since June 2015.