Redefine buys majority stake in London’s Holiday Inn Earls Court hotel

Property management company Redefine International has purchased a 60% stake in BNRI Earls Court, which owns the Holiday Inn Express Hotel in Earls Court, London.

The seller, Camden Lock and Earls Court, will own the remaining 40% in BNRI.

Redefine, which acquired the stake through its 71%-owned subsidiary Redefine Hotel Holdings (RHH), invested £8.7m in the transaction.

"Redefine invested £8.7m in the transaction."

The Holiday Inn Express Hotel in Earls Court was part of the Splendid Hotel Portfolio of seven properties, five of which were bought by Redefine in December 2010; the group says it has been involved in the operational management of the hotel for almost two years.

The 150-bedroom Holiday Inn Express Hotel is located near the Earls Court Exhibition Centre and Arena and the Olympia Exhibition Centre; Redefine expects the hotel to benefit from the proposed redevelopment of the area that will include new homes and a new International Convention Centre.

IHG Hotels has the franchise agreement to manage the hotel until 2013.

The hotel, valued at £27m, is partly funded by £12.5m Aareal Bank debt which will expire in November 2015; the £8.7m consideration and £400,000 acquisition costs were funded from RHH's recent capital raise and further co-investment.

Redefine International Property Management investment adviser Mike Watters said that the latest transaction is the first of a pipeline of acquisitions planned during the recent £127.5m capital raise.

"The limited service hotel sector continues to thrive in pockets of London and, together with our in-depth knowledge of the performance of this particular hotel and our belief in the potential of this sector, we believe this transaction illustrates a compelling investment opportunity which will deliver a high quality income to our investors," added Watters.

The group currently owns a portfolio of six hotels.