Singapore-listed property developer First Sponsor Group is teaming up with a consortium of investors to buy the Hilton Rotterdam hotel in the Netherlands for 50.4 million euros ($62.6 million).
First Sponsor is investing 12.4 million euros ($15.4 million) for a 24.7 percent stake in the deal, alongside four high-net-worth individuals, the company said in a stock exchange filing.
The seller is a wholly owned subsidiary of Park Hotels & Resorts, a NYSE-listed real estate investment trust that owns a large portfolio of Hilton hotels in cities including New York, San Francisco, Chicago and Honolulu.
First Sponsor Picks Up Profitable Dutch Asset
The 254-bedroom, five-star hotel is situated in the city centre of Rotterdam, a two-minute walk from the City Hall subway station. Built in 1963, the property underwent extensive renovation in 2013.
The asset generated earnings before interest, tax, depreciation and amortization (EBITDA) of about 3.3 million euros ($4.1 million) in 2017, bringing a net yield of about 6.5 percent for the investors, First Sponsor said in the statement. The hotel’s average occupancy last year was 71.3 percent on an average room rate of 133.9 euros ($166) per night.
“In addition, the Property has established a solid track record of maintaining profitability from the financial year ended 31 December 2013 post its extensive refurbishment works carried out between 2011 and 2013,” the statement notes. “This Acquisition hence augurs well with the strategy of the Group to grow the recurrent income stream of its property holding business.”
Alongside First Sponsor’s 24.7 percent stake, three other parties identified as the private investment vehicles of “high net worth individuals” are each taking a 24.7 percent interest. The remaining 1.2 percent stake is claimed by a “Dutch high net worth individual,” according to the statement.
Cross-Border Hotel Owner Builds European Portfolio
First Sponsor has rapidly become one of the largest hoteliers in the Netherlands, after acquiring Dutch hospitality group Queens Bilderberg (Nederland) for €171.4 million last August, giving it ownership of 16 hotels totalling 1,633 rooms across the country.
The company expanded its European portfolio in December by teaming up with City Developments Ltd (CDL) and Tai Tak Estates to purchase the Le Méridien Frankfurt Hotel for a total of 85 million euros ($100.1 million). In the same month, First Sponsor proposed to acquire a second office building in Amsterdam’s central business district for 55.5 million euros ($65.9 million).
The Cayman Islands-incorporated firm develops residential and commercial properties and owns hotels in China, in addition to its European portfolio. CDL’s Millennium and Copthorne unit along with Tai Tak Estates are controlling shareholders in First Sponsor. Tai Tak Estates is the Singapore holding firm for the family of Ho Sim Guan, a former UOB executive.