Multiple Acquisition
Opportunity
Focus Hotels Management was approached by a group of investors who were seeking investment in the UK hotel market with the stipulation that cash on cash and property appreciation returns achieved a minimum of 15% per year. Their aim was to build a small portfolio of quality 4-star country properties with UK OpCo bank funding and the investors providing the balance of the investment and working capital.
Focus Hotel Management contracted with the investors to execute this objective and set about identifying suitable properties and funders.
Project 1
Focus identified and purchased a 90-room branded country house hotel and spa in the Midlands which met all the investors’ criteria. Although trading reasonably well, it needed a capital injection to help reposition.
Focus delivered the refurbishment which included a luxury spa, an outdoor wedding venue and a new stylish lounge and contemporary bar. They went on to successfully reposition the hotel, driving the conference and wedding business, re-engaging with the local corporate market and creating a fantastic leisure destination.
This property significantly outperformed the 15% target set, achieving over 100% return on investment in the first 4 years.
Achievements
100%
Successful refurbishment
On time on budget
25%
Weddings Gross
Over 1st 4 years
40%
C&E Revenue
Over 1st 4 years
11%
RevPAR
Over 1st 4 years
66%
EBITDA
Over 1st 4 years
Project 2
Focus identified a second property for the same overseas investors and completed the acquisition of a 95-bedroom hotel and spa. Focus moved swiftly to deliver a £2m capital programme to upgrade this property.
In this case the investors return is almost 200% over three years, with the investors receiving 100% of funding back whilst still owning the property.
The property value has grown from £6M to circa £10M in this time.
Achievements
100%
Successful refrurbishment
On time on budget
1000
Leisure Club Members
Over 1st 3 years
18%
Revenue
Over 1st 3 years
17.5%
ARR
Over 1st 3 years
39%
EBITDA
Over 1st 3 years
