First Sponsor takes 24.7% stake in 50.4m euro acquisition of Hilton Rotterdam hotel

FIRST Sponsor group is taking a 24.7 per cent stake in a consortium that is buying the Hilton Rotterdam hotel in the Netherlands for a total estimated consideration of 50.4 million euros (S$81.5 million).

The purchase price is the aggregate of the property's commercial value of 51.0 million euros and the estimated amount of cash and working capital that the target will have at completion, said First Sponsor, a developer of property in China and the Netherlands. The final consideration will be subject to closing adjustments.

First Sponsor's share of the purchase price is about 12.4 million euros.

The hotel is a 254-bedroom five-star establishment that sits in the prime city centre of Rotterdam and has been profitable since 2013. The hotel generated earnings before interest, tax, depreciation and amortisation (Ebitda) of about 3.3 million euros in 2017. Assuming a property acquisition cost of 51 million euros, the 2017 Ebitda represents a net yield of about 6.5 per cent, said First Sponsor.

The hotel's average occupancy in 2017 was 71.3 per cent on an average room rate of 133.90 euros per night. Extensive renovation was completed in 2013.

The other consortium members are three private investment vehicles of high net worth individuals and a Dutch high net worth individual investing directly. All but one of those consortium members will hold a 24.7 per cent stake in the target, like First Sponsor. The final consortium member will hold a 1.2 per cent interest.

The seller of the hotel is a wholly owned subsidiary of Park Hotels & Resorts Inc, one of the largest publicly traded lodging real estate investment trusts on the New York Stock Exchange.