Sale of Stansted Hotel to reinvest in further residential Master Development
Urban&Civic plc announces that it has sold the recently completed Hampton by Hilton hotel at Stansted Airport to LGIM Real Assets (Legal & General) for a minimum consideration of £48.3 million. An additional sum of up to £1.1 million will be paid to Urban&Civic, depending upon operational performance over the next two years. The new hotel opened for trading in late July 2017 and is one of only two that are on-terminal at Stansted. Initial occupancy levels and achieved room rates are running above pre-opening forecasts.
The minimum consideration represents a projected yield on stabilised EBITDA three years forward of 6.75 per cent and is 15 per cent higher than the EPRA valuation of the completed asset in the interim balance sheet as at 31st March 2017. Profit realised on actual cost is expected to be in the order of £8.5 million. Cash returned back into the business, after accounting for development project bank debt, will exceed £30.0 million.
Proceeds of the sale will be directed into the Master Development of further strategic projects in which Urban&Civic is now the market leader. Shareholders can anticipate the early announcement of investment in new large-scale projects, consistent with the Company’s strategy to accelerate quality housing delivery in areas of high demand and population growth.
Commenting upon the sale Nigel Hugill, Chief Executive, said:
"The sale of Stansted represents an obviously strong outcome for the Group but the core reason for establishing Urban&Civic was to provide new housing choices and accelerate supply through Master Development. That involves creating environments in which people actively want to live and a delivery structure that encourages speed and quality from those housebuilders looking to expand output. The model can be seen to be working and is directly consistent with current Government policy. We shall be going all out from here. "