RBS Real Estate Asset Management (“RBS”) has saved over 130 local jobs and prevented the immediate closure of five hotels in East Anglia after their tenant filed for administration late last month. As the freeholder of all five properties, RBS worked quickly to negotiate the acquisition of the tenant’s fixtures and fittings from the administrator and the surrender of the leases.
Having achieved this, RBS was able to pass the management of all five hotels to Jupiter Hotels Management Limited, a new hotel management company created by Jupiter Hotels, RBS’ 50-50 hotel investment joint venture with Patron Capital, the pan European real estate investor. This enabled RBS to keep five important local businesses open, secure the jobs of over 130 employees and honor the bookings for 67 local weddings and events where deposits had been taken or advance payment had been made.
The portfolio of Choice Hotels comprises four three-star Quality Hotel branded properties located in Bury St Edmunds, Colchester, Peterborough and Kings Lynn, as well as the four-star 76-bedroom Clarion Collection Hotel Cromwell in Stevenage.
The creation of Jupiter Hotels Management Limited is also aligned with Jupiter Hotels’ strategy for growth and allows it to create value by utilizing the expertise of its management team through the management of third party owned hotels. As a result of this new contract, Jupiter Hotels now has a portfolio of 3, 177 rooms across 31 owned, leased and managed hotels around the UK.
This transaction follows Jupiter Hotels’ £110 million (approx. €131.2 million) purchase of a portfolio of 26 Ramada branded Jarvis hotels (comprising 21 freeholds and five leaseholds) from administration in September 2011, securing the future of 1500+employees. Shortly after this acquisition, all 26 hotels were rebranded as Mercure hotels and, benefitting from the expertise of the Jupiter Hotels team, the businesses have been turned around with a resultant doubling of EBITDA.
Helen Gordon, Global Head of RBS Real Estate Asset Management, said: “Having been notified by the administrator that the hotels’ operator had filed for administration and that, as a result, they were going to close, we worked quickly to ensure that these five important local businesses are kept open and over 130 jobs were saved. We believe that this agreement represents the best possible outcome for the hotels and their staff, as they are able to continue trading and leverage both RBS and Jupiter’s expertise in the hospitality sector. We are also very pleased that our quick action has allowed us to honor a number of bookings for important and often once in a lifetime events such as weddings, which had already been paid for and were therefore at risk.
Furthermore, we have been able to increase Jupiter Hotels’ exposure to midscale hotels as we look to return these businesses to profitability, and establish Jupiter as a market leader in this segment.”
Source: FTI Consulting