GuestInvest, a buy-to-let hotel company, has acquired two more central London properties in a deal worth £120 million.
GuestInvest, a buy-to-let hotel company, has acquired two more central London properties in a deal worth £120 million.
The company has bought a Grade Two-listed building close to Hyde Park as well as a row of houses in Notting Hill, after securing a further £97.5 million in equity and debt from Bank of Scotland.
The company’s first hotel, the 20-bedroom Guesthouse West, was launched in 2004 and is also located in Notting Hill.
GuestInvest intends to refurbish the properties and turn them into hotels. The Grade Two-listed property will be called The Jones and is set to open its doors to guests later this year. Once refurbished, the acquisitions will add a further 433 rooms to GuestInvest’s existing portfolio of four hotels.
The GuestInvest concept enables investors to buy a room in a hotel on a 999-year lease, receiving a return on their investment by letting it out, plus any capital appreciation on re-sale. GuestInvest manages the hotel and maximises room occupancy sharing room revenue 50/50 with the investor. A minimum 6 per cent return is guaranteed for the first year of the hotel’s operation.
According to professional services firm Deloitte, the hotel segment of the commercial property market is bucking the trend of a general downturn. Hotel occupancy rates climbed to 83.6 per cent in 2007, with revenue up more than 10 per cent.
Since GuestInvest was launched in 2004, the company, which has expanded its portfolio to almost 400 hotel rooms and entered into a £140 million joint venture with the Bank of Scotland Corporate.
BDO Stoy Hayward acted as auditor and tax adviser to the group. Other advisers included Lockton Companies International, which provided insurance and risk management advice.
GuestInvest is led by a six-strong board of directors, including seasoned property developer, Johnny Sandelson, Geraldine McKenna, ex-CEO of the Maybourne Hotel Group, and Steve Head, managing partner of Conseil International.
Under the GuestInvest concept, investors can use their room for free up to 52 nights a year. Currently investors are averaging returns over 8 per cent from Guesthouse West, the company’s first hotel in Notting Hill, although some investors are achieving as much as 8.72 per cent.
