First Sponsor takes 24.7% stake in €50.4m acquisition of Hilton Rotterdam hotel

The Hilton Rotterdam is a 254-bedroom five-star establishment that sits in the prime city centre of Rotterdam and has been profitable since 2013.
The Hilton Rotterdam is a 254-bedroom five-star establishment that sits in the prime city centre of Rotterdam and has been profitable since 2013. PHOTO: FACEBOOK/HILTON ROTTERDAM

SINGAPORE - First Sponsor group is taking a 24.7 per cent stake in a consortium that is buying the Hilton Rotterdam hotel in the Netherlands for a total estimated consideration of €50.4 million (S$81.5 million).

The purchase price is the aggregate of the property's commercial value of €51.0 million and the estimated amount of cash and working capital that the target will have at completion, said First Sponsor, a developer of property in China and the Netherlands. The final consideration will be subject to closing adjustments.

First Sponsor's share of the purchase price is about €12.4 million.

The hotel is a 254-bedroom five-star establishment that sits in the prime city centre of Rotterdam and has been profitable since 2013. The hotel generated earnings before interest, tax, depreciation and amortisation (Ebitda) of about €3.3 million in 2017. Assuming a property acquisition cost of €51 million, the 2017 Ebitda represents a net yield of about 6.5 per cent, said First Sponsor.

The hotel's average occupancy in 2017 was 71.3 per cent on an average room rate of €133.90 per night. Extensive renovation was completed in 2013.

The other consortium members are three private investment vehicles of high net worth individuals and a Dutch high net worth individual investing directly. All but one of those consortium members will hold a 24.7 per cent stake in the target, like First Sponsor. The final consortium member will hold a 1.2 per cent interest.

The seller of the hotel is a wholly owned subsidiary of Park Hotels & Resorts Inc, one of the largest publicly traded lodging real estate investment trusts on the New York Stock Exchange.