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CDL Hospitality Trusts (CDLHT) has announced the acquisition of Hotel Indigo Exeter for £19.4m.
The acquisition is expected to complete once the relevant conditions are met.
Hotel Indigo Exeter is an upscale lifestyle boutique hotel offering 104 rooms, with spa and gym facilities as well as two retail units.
After undergoing an extensive conversion from a House of Fraser department store, the hotel fully opened in October 2023.
The existing leases of the two retail units will continue until 2033 on a fixed rent basis with tenant break options in June 2028 and March 2029 respectively.
The estimated total cost of the acquisition is approximately £21.5m, which comprises the purchase price of £19.4m and transaction costs (such as stamp duty, HBT trustee manager’s acquisition fee, professional due diligence and advisory fees) related to the acquisition that amount to around £2.0m.
CBRE Limited, an independent external valuer, estimated that the property was worth £19.5m based on its market value as of September 30, 2024. The valuation comprises the hotel component at £15.5m and the retail component at £4.0m.
Additionally, the hotel will continue to operate under the Hotel Indigo brand name, which is part of the collection of brands under the InterContinental Hotels Group.
Mr Vincent Yeo, CEO of CDLHT’s managers, said: “We are delighted to acquire a high quality asset with brand new interiors in the best location in the heart of Exeter. This is a continuation of our strategy to pursue accretive acquisitions that augment our income streams. This acquisition also increases our exposure to the burgeoning lifestyle hotel market .
“Hotel Indigo Exeter is a compelling opportunity to acquire a hotel with top tier design and build specifications, at a significant discount to the current replacement cost. There are areas we have identified in the operations where we could potentially drive better performance befitting of the quality of the product and its excellent location.”
Yeo added: “In addition, there is a limited new supply of rooms within the city centre for the next few years. We believe our Stapled Securityholders will benefit from this opportune acquisition, especially at a point when the interest rate cycle is expected to turn.”
