easyHotel, the owner, developer and operator of "super budget" branded hotels, announces that it has agreed to take over the 104 room Tune hotel in Newcastle, UK.
The hotel at Proctor House, 23-29 Side, Newcastle, is centrally located between the City Centre and The Quayside, and an 8-minute walk from Newcastle Central Station. The property, which opened as a hotel in 2014, is in excellent condition and will open as an easyHotel next month following minor rebranding works to the building.
Newcastle is the largest City in the North East, famous for its bar and nightlife scene, attracting 2 million visitors per year. The City is home to a number of businesses and leisure attractions, including The Baltic Centre, The Great Northern Museum, The Metro shopping centre and Newcastle United Football Club.
Newcastle will be the Group's second leased site. The hotel will be let on a 25-year FRI (fully repairing and insuring) lease at an annual rent of £442,000.
As previously outlined, whilst the Board is focused on accelerating the Group's expansion through owned and franchise hotel development, it will consider specific leased sites, providing they enable the Group to build a footprint in strategic gateway locations. The Board applies strict due diligence when assessing lease opportunities, stress testing a minimum risk adjusted rent cover in line with hotel sector standards.
This selective approach to leased opportunities will enable the Company to increase the number of hotel rooms under its direct control, grow its earnings at a lower capital cost and maintain the Group's (blended) ROCE target of 15%.
"This is an excellent opportunity to establish a footprint in the vibrant and popular City of Newcastle. The 104 rooms will require minimal work to bring them in line with our brand and we will open the new easyHotel Newcastle next month.
"It has been a year of accelerated growth for the Group, validating our strategy of offering comfortable, affordable accommodation in key tourist and business locations in the UK and internationally. The Board looks forward to announcing further opportunities for the easyHotel brand as we continue to expand our development pipeline."
United Kingdom (Ipswich, Sheffield, Leeds), Spain (Barcelona) Subject to planning consent: United Kingdom (Cardiff and Oxford - lease).
UAE (Dubai), Germany (Bernkastel-Kues), Portugal (Lisbon), Turkey (Istanbul), UK (Belfast, Reading), Iran, Sri Lanka.