The acquisition is financed by existing credit facilities. The hotels will be managed by the hotel operator HR Group under long-term revenue-based leases. For 2019 the hotels are expected to contribute approximately MEUR 5.5 in rental income and MEUR 5.0 in net operating income, on an annualised basis. The acquisition is expected to be closed during the third quarter 2019.

“The acquisition is industrially sound and contributes to a further diversification of Pandox’s portfolio both geographically and brand-wise. The hotel properties are in good locations in stable domestic cities in Germany and are mainly driven by domestic demand with a good balance between the business, meeting and leisure segments. The hotels are full-service hotels in the upper mid-scale segment with good guest ratings and an average size of 188 rooms.”, says Anders Nissen, CEO of Pandox.

“HR Group is very pleased to have Pandox AB as a strategic investor for the three hotel properties. The transaction marks a key-milestone in our company history and the start of a long-term partnership with one of the leading hotel property owners in Northern Europe. We’re delighted to continue with the operation of the three hotels and to strive for an excellent performance and guest experience with our teams. We look forward to further cooperation and to achieve mutual and continuous growth.”, says Ruslan Husry, CEO of HR Group.

The acquisition of the hotel properties is made by acquisition of shares in a company with an underlying property value of MEUR 103 on a debt free basis. The acquired hotel property portfolio has a yield of approximately 5.7 percent, before transaction costs. The seller is HR Group which also remains as a minority owner with 5.1 percent.

HR Group will manage the hotels under 20-year revenue-based lease agreements under the well-known German brand Dorint Hotels & Resorts. The tenant has a far-reaching responsibility for maintenance, repair and investments in the properties.

The acquisition is expected to be closed in the third quarter 2019, provided that all conditions in the share transfer agreement have been fulfilled. The hotel properties will be reported in the business segment Property Management.