Hotel investments provide opportunity for a good level of regular annual income, which should rise as the asset management efficiencies are generated – leading to capital growth following the increase in profitability.
Strategy
Working closely with our asset managers, we aim to acquire interests in under-valued and under-performing hotels. These are primarily in key strategic locations outside of London, where opportunities exist to rebrand and/or reposition them – to enhance trading revenues, generate strong annual cash yields, and significantly improve capital value.
Our hotels typically benefit from a franchise agreement with a branded hotel chain – for example Holiday Inn – and are run day-to-day by local staff, overseen by an experienced hotel management company.
Our partners have a proven track record in originating and completing hotel acquisitions in the UK. Together, they provide a comprehensive service which includes deal origination, the provision of debt finance and post-acquisition, as well as the asset management of the hotels. We fund the acquisition of hotels with no more than 50% funding from lending banks – but if investors do not want to participate in this trade, then it can be noted on their Application Form.
Download our Investment Sector overviewSecurity
A hotel partnership acquires the freehold, or long leasehold, interest in each hotel – with full title at the Land Registry. These type of assets underpin the security of capital afforded by this trade. Our partners have a proven track record in originating and completing hotel acquisitions in the UK and will provide a comprehensive service – including deal origination and the provision of debt finance. Post-acquisition, they will then manage the hotel assets.
Example Investment: Murrayshall Country House Hotel & Golf Club, Perth, Scotland. Acquired November 2016.
Project Spotlight
Holiday Inn Express – Strathclyde
Where: Strathclyde Park Hotel, 15 miles south west of Glasgow
Background: The hotel is a modern budget hotel, located just of the M74, by Strathclyde Country Park. The asset is situated conveniently close to M&D’s, the largest Scottish theme park.
Originally opened in 1996, the 120-bedroom hotel is 2.68 acres in total and was the first Holiday Inn Express branded hotel to open in Europe.
Investment Mandate: Hotel investments qualify for Business Relief after two years and provide a mix of capital growth and regular income streams through room rates, venue hire and food and beverages.
The strategy for the hotel was to finish refurbishment works to all 120 bedrooms, reception and restaurant dining areas.
The substantial refurbishment works to all rooms and common areas were
completed by Q2 2019, bringing the hotel up to the latest brand compliant standards.
Once complete, the hotel organised lunches and evenings for corporates and local businesses to showcase the refurbishment.
The focus was then to continue to contract groups and tours once lockdown measures were reduced and the hotel was once again open to accommodating the wider public.
Photo: Holiday Inn Express, Strathclyde. April 2019.
Hotel investments are accessible through the following services:
Stellar Business IHT Service
A discretionary managed service which provides numerous succession planning and tax efficiency options for business owners – either following the sale of a company, or to invest excess company capital to maintain tax efficiency.
Stellar Growth IHT Service
This discretionary managed service involves the creation of a privately owned limited company for each investor, to access a portfolio of asset-backed Investment Sectors – targeting 5% growth per annum.