A Newcastle hotel has been put up for sale by a 海角视频 investment fund with a 拢31.8m price tag.
Property consultant Knight Frank has been appointed to sell the 274-bedroom Leonardo Hotel 鈥 the former Jury鈥檚 Inn hotel 鈥 at St James Gate in Newcastle city centre. The vendor is seeking offers over 拢31.8m for the hotel which is let to Leonardo Hotel Management (海角视频) Ltd for the next 14.4 years, bringing in annual rent of 拢2.9m.
The site was one of 35 海角视频 and Ireland Jury鈥檚 Inn hotels to be rebranded under the Fattal Hotel Group-owned Leonardo banner last year, when it also underwent a major refurbishment. The potentially lucrative sale of the hotel comes six years after a former owner, a London investment firm, snapped up the building as well as adjoining apartments and offices in a 拢20m deal 鈥 one of the biggest deals involving North East property at the time.
If sold for 拢31.8m, Knight Frank says the new owner can expect a running yield of around 8.5% this year, rising to 9.86% in 2028, and 11.05% in 2033. Newcastle has been one of the 海角视频鈥檚 best performing hotel markets post-pandemic, with 2022 revenue per available room (RevPAR) over 15% higher than in 2019. In 2022 occupancy was 74.2% compared to 73.2% in 2019.
Partner at Knight Frank, Charlie Fletcher, is expecting interest to be high, adding: 鈥淭his is a well-located, recently rebranded city centre hotel only a few minutes鈥 walk from Newcastle Central train station and it is operated by a well-known international brand. The investment is priced attractively and at the quoted price it is also substantially underpinned by its vacant possession value.鈥
Dickon Wood, Capital Markets Partner at Knight Frank in Newcastle, adds: 鈥淣ewcastle has almost 8,500 hotel rooms and has only experienced modest room supply growth in the last five years, with a very limited supply growth forecast for the next five, so this asset鈥檚 place and potential in the market is very secure.鈥
