Frasers Hospitality buys boutique hotel group in Britain

A Malmaison hotel in Britain. Frasers Hospitality is buying the Malmaison Hotel du Vin group of boutique hotels for £363.4 million ($770 million) - its biggest acquisition yet.
A Malmaison hotel in Britain. Frasers Hospitality is buying the Malmaison Hotel du Vin group of boutique hotels for £363.4 million ($770 million) - its biggest acquisition yet.PHOTO: FRASERS CENTREPOINT LIMITED

FRASERS Hospitality is buying the Malmaison Hotel du Vin (MHDV) group of boutique hotels for £363.4 million ($770 million) - its biggest acquisition yet.

MHDV owns two upscale hospitality brands - Malmaison and Hotel du Vin - comprising 29 boutique hotels and 2,082 rooms across 25 British cities.

The acquisition doubles Frasers Hospitality's offerings in Europe to about 4,000 rooms, parent company Frasers Centrepoint said in a Singapore Exchange announcement yesterday.

The two brands "perfectly complement" the company's portfolio, said Frasers Hospitality chief executive Choe Peng Sum yesterday. The firm provides serviced residences through its Fraser Suites, Fraser Place and Fraser Residence divisions, serviced residences Modena by Fraser, which is focused on China and second-tier cities there, and Capri by Fraser, a serviced apartment-hotel hybrid.

"What we did not have was the boutique lifestyle segment. We did not want to go into the mainstream hotels but were looking at niche, boutique hotels, the fastest-growing sector," said Mr Choe.

The company will expand the two brands in Britain and take them to the rest of Europe and Asia, he added. "They would immediately stand out as a different offering."

Both MHDV brands have had average occupancies of over 80 per cent for the past three years, with revenue per available room at 7 to 10 per cent above their peers'.

Malmaison hotels are in notable buildings in London and regional city centres, while outlets under the Hotel du Vin brand are in historic buildings across Britain's cathedral and university towns.

The acquisition allows the company to enter new markets, including Henley-on-Thames, Wimbledon, Bristol, Cambridge and Oxford, Mr Choe said.

It marks the first purchase of a hotel chain by Frasers Hospitality, which in the past has grown by purchasing individual assets.

The company would consider both modes of growth, Mr Choe said, adding: "If they are smaller chains but not that well-branded, we could also rebrand them."

Frasers Hospitality remains committed to expanding its other brands in Europe, he added. It expects to open Capri by Fraser outlets in Frankfurt and Barcelona in August, and another in Berlin at the end of next year. It is also opening a Fraser Suites in Geneva at the end of this year.

The purchase amount values MHDV's hotels at about £170,600 per room. The acquisition will be funded by a combination of an external term loan facility and internal funding sources.

It brings Frasers Hospitality's portfolio to 129 properties across 77 cities and about 21,100 rooms.

wrennie@sph.com.sg

A version of this article appeared in the print edition of The Straits Times on June 18, 2015, with the headline 'Frasers Hospitality buys boutique hotel group in Britain'. Print Edition | Subscribe