Singapore-listed hospitality stapled security, CDL Hospitality Trust (SGX:J85), announced on 9 September that it has entered into a share purchase agreement to indirectly acquire Cambridge City Hotel in the UK for GBP62.5 million (SGD135.3 million).
The acquisition will be effected by way of acquiring 100% of the issued capital of LR (Cambridge) Limited from London & Regional Group Trading No.3 Limited. The purchase consideration for the acquisition is based on the property price of GBP61.5 million and payment of approximately GBP1.0 million for the cash in LR (Cambridge) Limited.
Upon completion of the acquisition, LR (Cambridge) Limited will be renamed as CDL HBT Cambridge City Hotel (UK) Ltd and continue to hold and operate the 198-room property located in the Cambridge city centre.
The REIT has described the acquisition as being in line with its strategy to invest in markets with good growth potential. “Cambridge has been one of the strongest performing hospitality markets in UK and the burgeoning life science cluster will support the growth trajectory of the market”, said Vincent Yeo, CEO of the REIT’s manager. “This acquisition of Cambridge City Hotel is a rare opportunity for us to acquire a prime asset in a tightly held investment market”, he added.
The acquisition, which will mark CDL Hospitality Trust’s maiden entry into the UK market, will be fully funded initially by GBP-denominated debt. Upon completion the REIT’s gearing will increase from 32.0% to 35.8%.
Units of CDL Hospitality Trust are currently listed on the Singapore Exchange at SGD1.32.