Investment idea

  • Lethendy Estates
    is an investment holding company aiming to invest in individual premium hotels under one asset manager in sub-prime locations across the United Kingdom which will allow to improve cost effectiveness, unify management process and increase the yield.

  • Macroeconomics and hotel industry conditions bring additional confidence in developing the investment idea.

  • Deals have been financed by senior UK banks financing with LTV ratio of 50-60%.

  • Selective CAPEX for renovation and rooms extension will be done individually and also secured by the senior debt.

  • Return on equity in the range of
    18-22% IRR
    with interim dividends payments to the shareholders and investors.

  • Strategic partnership with
    Michels & Taylor
    which is one of the largest hotel asset management companies in Europe (winner of the the Best Hotel Consultancy 2016 — Europe).

  • Target asset profile

    • Size

      Medium-sized hotels (c50-150 beds) in sub-prime locations with existing high occupancies (c75% +) with a potential to increase occupancy

    • Price

      Single property acquisition price of c£10-20m depending on the location and the possibility to gain higher returns from property improvements

    • Asset type

      Acquired as single assets or in groups of 2 or 3 with individual approach on CAPEX renovations or expansion of the rooms based on unsatisfied demand

    • Manager

      Managed by one top-tier asset manager Michels & Taylor with a unified approach to managing the portfolio

  • Value added opportunities

    • Market

      Repositioning further up-market, searching new niches with strong demand

    • Management

      Improved unified management approach bringing the perception of the customers to higher levels

    • CAPEX

      Targeted refurbishment & CAPEX investment

    • Networking

      Stronger distribution channels improving the economics

    • Events

      Bedroom & event room extensions with a potential in this space

    • Awarness

      Brand franchise optimisation where appropriate