EasyHotel plc, the owner, developer and operator of 'super budget' branded hotels, has acquired a freehold site in central Dublin, to develop a purpose-built, freehold easyHotel.
Located on the corner of Benburb Street and Wood Lane, Dublin, the site already has planning permission in place for a 96-bedroom hotel. However, the group believes there is potential to extend the development further to a 130-bedroom hotel and will apply to vary the existing planning permission accordingly.
This freehold site has been acquired for €9m (£8.04m). The 130-bedroom hotel is expected to have a total investment cost of €18m (£16.08m) and will be funded using cash from the Group's balance sheet, together with local debt financing.
The investment in Dublin is the brand's third new site since its successful fundraising in March 2018. It also marks easyHotel's second owned hotel investment in Europe with the group's first owned European hotel, easyHotel Barcelona (204 rooms), due to open this summer.
In support of its ambitious growth plans, easyHotel continues to expand its development pipeline of owned hotels in key tourist and city centre destinations across both the UK and Europe.
As previously highlighted at the time of its interim results, the firm intends to balance the number of owned hotel openings between the UK and Continental Europe, where recently the Group's franchised hotels have delivered a particularly strong performance.
With a strong UK development pipeline already confirmed, the easyHotel will be appointing a Group Development Director to lead the development in Europe, together with a dedicated team focussed initially on Spain, France and Germany. It is expected that this additional resource will be in place before the end of the current financial year.
The costs associated with these appointments will have a small impact on earnings for the current financial year and are expected to reduce EBITDA by c£750,000 in the 2019 & 2020 financial years. However, the group believes that the additional Continental European hotels this team is targeted to deliver will be significantly earnings enhancing from 2021.
As previously announced, four new owned hotels (517 rooms) are expected to open by the end of the current calendar year. easyHotel Maastricht opened at the beginning of July taking the total number of hotels in the Group to 28. There are a further four new franchised hotels (336 rooms) nearing completion, and although the official openings have been delayed, they are still expected to open by the end of the current calendar year.
CEO Guy Parsons said, 'We are delighted to have secured this excellent site in the vibrant City of Dublin, our third investment since our successful fundraising in March 2018 and our second owned hotel site in Europe. The Dublin site takes our pipeline of owned/leased projects to 1,280 rooms in addition to the 1,782 franchise rooms currently under development.
'Europe holds a number of attractive opportunities for the easyHotel brand and we are keen to achieve a balance in our development pipeline between the UK and Continental Europe, as we look to accelerate our presence in these markets.
'The Group has a strong owned hotel development pipeline already established in the UK and this additional operational resource announced today will ensure that we are well positioned to take advantage of more opportunities in Continental Europe, creating value for our shareholders and underpinning the long-term growth of the easyHotel brand.'
