Adagio Aparthotel Edinburgh is set to be bought by Swedish hospitality group Pandox, as the company has entered into an agreement to acquire the 146-bedroom property for £40.5 million.
Adagio Aparthotel Edinburgh was built in 2016 as part of a city development project in the Scottish capital.
The property is found in the city’s Old Town, close to the famous Royal Mile.
It comprises 146 furnished apartments and studios fitted with fully-equipped kitchens, and aparthotel’s services include access to a fitness room and private car park.
Liia Nou, Chief Executive of Pandox, commented: “We are very pleased to acquire Adagio Aparthotel Edinburgh. It is an attractive hotel property in an exciting segment in a dynamic and expanding city.
“The hotel is strategically and centrally located in one of the most attractive hotel markets in the UK with well-diversified demand and very good RevPAR levels.
“The acquisition provides exposure towards the extended-stay segment, which we hope will grow over time as part of our portfolio.”
The total transaction value will include transfer tax and will be financed by cash and existing credit facilities.
Pandox expects the hotel to contribute approximately £2.2 million in net operating income per year in a normalised, post-Covid market.
The transaction has been made in the form of acquisition of assets and liabilities, including the property and an existing revenue-based lease with minimum guaranteed rent and a remaining term of 15 years.
The hotel property also has four additional small tenants.
Pandox’s current portfolio includes 157 hotels with approximately 35,500 hotel rooms across 15 different countries, including Manchester’s Midland hotel, the Radisson Blu Glasgow, two Hilton-branded hotels at London Heathrow Airport and 17 Jurys Inn hotels around the UK.