PPHE Hotel Group, has entered into an agreement to repurchase the freehold interest in Park Plaza London Waterloo for £147.9 million.
PPHE says £136.5 million of the £147.9 million will be funded by a new debt facility which it expects to finalise prior to completion and which will be secured on the freehold and long leasehold interest in the hotel. The remaining balance is to be settled from the group's existing cash resources.
In June 2017, PPHE entered into the initial sale and leaseback transaction, selling its interest in the 494-room hotel for £161.5 million and entering into a 199-year lease subject to an initial annual rent of £5.6 million with future annual inflation adjustments. The annual rental obligation currently is £7.3 million, rising in line with RPI.
The transaction is expected to close in the coming months.
What they said
Greg Hegarty, co-CEO of PPHE said: “At the time, the initial sale and leaseback represented an attractive opportunity to release capital from this asset to reinvest in our broader development pipeline. Similarly, the purchase of this freehold interest is a good use of capital, protecting the group from future rental uplifts whilst increasing the freehold exposure in our portfolio. As freehold owner, we will have increased strategic optionality on refurbishment and development as well as benefiting from potentially better financing terms and full asset value capture.”