CDL Hospitality Trusts buy Manchester hotel for £52.5m

THE trustee-manager of CDL Hospitality Business Trust has acquired a five-star hotel near Manchester's city centre by way of acquiring all of the issued share capital of its owner-operator for £52.9 million (S$94.7 million). The trust is part of Singapore-listed CDL Hospitality Trusts (CDLHT).

The trustee-manager said in a release on Thursday night that through its indirect wholly owned subsidiary, CDL HBT North Ltd, it has bought The Lowry Hotel by acquiring The Lowry Hotel Limited, which will continue to hold and operate the hotel.

The total sum of £52.9 million comprises the property price of £52.5 million and a £0.4 million payment based on the estimated net working capital and cash of The Lowry Hotel Limited.

The sum will be fully funded initially by pound-denominated debt by HBT. Last month, HBT secured a S$200 million uncommitted multi-currency unsecured loan facility with a bank.

After the acquisition, CDLHT's gearing will increase from 36.8 per cent to 39.1 per cent.

Assuming CDLHT owned the property from Jan 1, 2016, the pro-forma net property income yield of the property for FY 2016 would be 7.3 per cent, based on the property price of £52.5 million, said the release.

On a pro-forma basis for FY 2016, this translates to a DPS (distribution per stapled security) accretion of 2.7 per cent.

The hotel offers 165 rooms and a wide array of facilities. It is located near the heart of Manchester city centre, and about 16 km from Manchester Airport.

It is within the vicinity of top office developments such as Spinningfields, prominent retail establishments such as Arndale Shopping Centre, and entertainment hubs such as Royal Theatre Exchange, the Manchester Opera House and the Manchester Arena.

Shares of CDL Hospitality Trusts closed 0.65 per cent higher at S$1.54 apiece on Thursday before the announcement.