1st Jul 2015 07:01
LONDON (Alliance News) - Action Hotels PLC Wednesday said it has agreed to buy the ibis budget hotel at Melbourne airport in Australia for USD8.8 million.
Action Hotels, which owns three and four-star hotels in the Middle East and Australia, said the acquisition of the 73-room hotel will be the seventh ibis branded hotel in the group's portfolio, and the second ibis hotel which it owns and operates in Melbourne. ibis is owned by France's Accor SA.
In 2014, the ibis hotel averaged 89.8% occupancy and made earnings before interest, tax, depreciation and amortisation of USD1 million. Action Hotels said its expects the acquisition to be immediately earnings enhancing for 2015, adding that it also allows the opportunity to develop or further extend the existing hotel on the acquired land in the future.
Action Hotels will fund the purchase through USD3.7 million from its existing cash resources and the remainder through debt secured on the hotel property provided by the property's current lender St Georges Bank, at a fixed rate of 4.99% per year for five years to 2020.
Action Hotels now operates nine hotels, with a total of 1,561 rooms, adding that it has a fully funded development pipeline of a further nine hotels.
Action Hotels expects the acquisition to complete within 90 days.
"We have secured this strongly performing hotel asset in an attractive market at an attractive price and the operational performance of this hotel will immediately contribute to our group profitability. The acquisition will further benefit from the ability to leverage our increased scale of operations in Australia whilst providing strategic optionality in the region," Action Hotel Chairman Sheikh Mubarak Al Sabah said in a statement.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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