Norgani Hotels is to purchase Kapiteeli’s 15 hotel properties in Finland and a large congress centre for 306 million euros (NOK 2,420 million).
The purchase is a strong match to Norgani and represents a considerable strategic investment in the Finnish hotel property market. Through the acquisition Norgani becomes the second largest hotel property owner in Finland, further strengthening Norgani’s position as the leading pan-Nordic hotel property owner with 79 properties and 13,379 rooms (+28%).
- We are very pleased to have reached this agreement, which is a result of Norgani’s pan-Nordic strategy to expand its investments and presence in Finland. Through this transaction, we are now a major player in the Finnish hotel property market, which we believe has a great potential, says Kjell Sagstad, CEO of Norgani Hotels ASA.
Norgani will acquire the portfolio consisting of 15 predominantly good 3-4 stars hotel properties and the Helsinki based Marine Congress Centre for an amount of EUR 306 million of which approximately EUR 296 million is the value of the properties. The hotel properties are newly refurbished and an amount of approximately EUR 90 million has been invested in upgrading over the past 4-5 years. The remaining duration of the lease contracts is 6.5 years.
The gross rent in 2005 was NOK 152.5m (EUR 19.3m) and in Q1 2006 NOK 41.8m (EUR 5.2m). Norgani believes there is a significant rent level upside potential in the Kapiteeli portfolio to be realized over the next 5-7 years. There is also attractive expansion potential for some of the properties.
Kapiteeli is a Finnish property investment group owned by the State of Finland. The Group’s 16 properties amount to 2,913 rooms (approx.
190,000 sqm) which give an average size of 194 rooms per hotel.
Following the transaction Norgani owns 78 hotel properties and one congress centre with a total of 13,379 rooms on a pan-Nordic basis.
This makes the company the undisputed market leader with 5.4% of all hotel rooms in the Nordic hotel property market
Kapiteeli’s largest hotel properties are located in the cities: Helsinki, Espoo and Tampere. In Helsinki the company owns four of the ten largest hotels.
Kapiteeli’s largest leaseholders are the international Scandic/Hilton chain which together contributes to approximately 90% of the rental income from Kapiteeli’s hotel properties.