Stockholm-based hotel investor Pandox has entered into an agreement to buy The Midland in Manchester for £115m, and is planning to start an £11m refurbishment of its rooms later this year.
The 312-room hotel was bought from Aprirose, which acquired The Midland as part of a portfolio sold by Bain Capital Credit and Canyon Partners in 2017 for £525m. The value of the property totals £102m, equating to a 5.7% net initial yield.
Fattal Hotels Group will become the operating partner and all hotel operations will be transferred to the company after the acquisition, while Pandox will retain ownership of the property.
The purchase is expected to be financed by a new bank loan and existing credit facilities. The hotel will be operated by Fattal under a revenue-based lease agreement.
Anders Nissen, chief executive of Pandox, said: “The acquisition of The Midland Manchester is industrially sound and meets all of Pandox’s acquisition criteria. The hotel, which has iconic status in Manchester, is an upper premium, full-service hotel with a very attractive central location and demand from all client segments. The hotel offers clear potential for increased revenues by upgrading the room product and by increasing the number of rooms. After the acquisition, Pandox will own two hotel properties with strong central locations in a city which is the economic and cultural nexus in one of the fastest growing regions in the UK.”
A joint investment between Pandox and Fattal of £11m to upgrade primarily rooms and bathrooms, is planned to be carried out starting this year.
The Midland Manchester has 312 rooms, and large public areas including four restaurants and 12 meeting rooms, of which the largest can hold 700 people.