Redefine International buys additional stakes in International Hotel Properties
Redefine International plc. will focus on UK real estate and, in line with this strategy, it has bought additional shares in International Hotel Properties (IHL) from Redefine Properties. It looks to have an increased presence in the country’s hotel property sector which sees as candidates for ensuring high ROI. With the acquisition, the FTSE 250 income-focused UK Reit is looking to expose itself further to a thriving UK hotel industry. Under its policy for hotel property expansion in the UK, it has raised its stake in IHL from 58.9% to 74.1%.
Redefine Properties has now decided not to expose itself to UK hotels and focus on the Polish real estate instead, said CEO Andrew Konig. He termed the deal opportunistic as well as strategic. The hotel group Tsogo Sun holds the remaining 25.9 per cent stake in IHL. Now, Redefine International does not have any related investments with Redefine Properties. The deal includes a transaction worth £7.5 million through cash and shares. As a result, Redefine Properties will hold 29.62% in Redefine International.
Redefine International CEO Mike Waters said that the acquisition enhances its exposure to nine limited-service UK hotel assets with strong trading records. He added that the deal supports its strategic priority of achieving greater scale through investing in the right earnings enhancing opportunities. He said that the group’s diversified portfolio provided it the ability to invest in assets with strong property fundamentals across sectors with best growth prospects. He further said that the acquisition is according to its hotel strategy, which focusses on investment in well-located limited service hotels in the country.
The company perceives the hotel industry in the UK as very promising, having high potential for growth and expansion. Waters said that the market outlook for the London hotel sector is positive. The brands being acquired including the top names in the hotel industry. Some of the brands under the portfolio are – Holiday Inn Express and Hilton which provide a defensive position in case of any economic downturn. He said that the cost savings will be generated through its delisting of IHL and the integration of the hotel assets into the company’s existing hotel portfolio.
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