PATRIZIA Immobilien AG has sold its Melia Hotel building in Manchester for approximately £30m (€39.5m) to a privately owned UK group. The sale of the 208-room 4-star hotel has been agreed at a yield of 4.85% on 25-year lease to Melia.
PATRIZIA purchased the hotel as part of its acquisition of the First Street site in Manchester in May 2015, a 20-acre development which includes office, residential, retail and leisure components. As progress continues elsewhere at First Street, the sale of the hotel crystallises the asset management activity which has taken place at the building, allowing PATRIZIA to reinvest capital in other development management initiatives.
Operating as INNSIDE Manchester, a new brand by Melia, the hotel includes spacious rooms, a Mediterranean street food restaurant and a wellness centre with a Finnish sauna. Located in the heart of the First Street development, the hotel is frequented by both business travellers and leisure customers, allowing access to Manchester’s local cultural, shopping and business areas.
Rob Brook, head of portfolio management PATRIZIA UK & Ireland, commented: “First Street continues to thrive and the sale of this quality hotel in the heart of the scheme is a testament to its success. Investor interest is high as this once under-utilised area of Manchester is blossoming into hub for entertainment, working and living. With our asset management activities complete at the hotel, this is the first sale we have undertaken at First Street and now means we can recycle our balance sheet in new development management initiatives being pursued by PATRIZIA.”
