Pandox has inked an agreement with controlled affiliates of Starwood Capital to acquire DoubleTree by Hilton Edinburgh City Centre for £49 million.
Located at 34 Bread Street, the hotel comprises 138 rooms, conference facilities, a restaurant, bar and an event venue with views of Edinburgh Castle. The property underwent an extensive renovation in 2014 when it was repositioned into a DoubleTree by Hilton.
Pandox says it will evaluate both the hotel’s brand strategy and operational model leading up to 2027 when the existing franchise agreement expires, adding that there are good possibilities to further develop the hotel product and strengthen its competitiveness in higher demand segments.
Initially, the hotel is expected to generate a yield of more than 7.5 per cent with the potential to increase it to around 9 percent over time through operational improvements and targeted investments.
In Edinburgh, Pandox already owns 146-room Aparthotel Adagio Edinburgh Royal Mile. In August, it entered into talks to entered into talks to acquire a London hotel portfolio worth around €260 million. In 2023, the Swedish company expanded its reach in the UK with its £53m purchase of 232-key QHotel The Queens in Leeds and its £40 million acquisition of 202-room Hilton Belfast.
The acquisition of DoubleTree by Hilton Edinburgh City Cnetre is expected to close in the fourth quarter of 2024, at the latest.
What they said
Liia Nõu, CEO of Pandox said: “DoubleTree by Hilton Edinburgh City Centre is a nice addition to our hotel property portfolio. The hotel is performing well with potential to further develop the hotel product and increase the return over time. The cooperation with Axiom Hospitality, which will comprise nine hotels in the UK, ensures effective operations and lower operational risk. The transaction is a good example of our ability to identify and make acquisitions which contribute to our earnings short term, while also laying the foundation for additional value creation long term.”