The transaction is expected to close 31 March 2016.

“We are pleased to have reached an agreement with Midstar AB to divest these eight hotel properties. The transaction is in line with Pandox’s strategy to continuously develop and optimise the hotel portfolio with focus on larger full-service hotels in strategic locations”, says Anders Nissen, CEO at Pandox.

The purchase agreement includes a rental guarantee from Pandox in favour of the buyer for three years. The purchase price substantially exceeds the book value of the properties per 31 December 2015. The realised value change, after provision for expected payment of guaranteed rent and including reversal of deferred tax of MSEK 59, is estimated to MSEK 160 (€17M).

The hotels’ total net operating income for 2015 amounted to approximately MSEK 50 (€5,3M).

The hotels, which are located in regional and smaller central cities in Sweden, have an average room size of 121 rooms. The hotels are smaller than Pandox’s average hotel, which means the hotel portfolio‘s average room size increases from 208 to 214 after the divestment.

Pangea Property Partners have assisted Pandox in the transaction.

The hotels in the deal:
Hotel City Number of rooms
Scandic Bollnäs Bollnäs 114
First Hotel Mårtenson Halmstad 103
Scandic Klarälven Karlstad 143
Stadshotellet Princess Sandviken Sandviken 84
Scandic Hotell Billingen Skövde 124
Quality Hotel Prisma Skövde 107
Scandic Umeå Syd Umeå 161
Scandic Östersund Syd Östersund 129
Total   965