London, UK – Ekistics Real Estate Partners I (“Ekistics”, “EREP I”), is pleased to announce the successful divestiture of the Mowbray Court Hotel (the “Asset”), a limited-service, three-star budget hotel – and the leading asset of its kind – located in Earls Court, London, to an experienced Middle Eastern hospitality group. Ekistics is a real estate private equity fund mandated to invest in direct equity, intermediate capital and debt opportunities in Western Europe with a focus on the generation of a consistent return profile, and downside protection across property cycles.
The transaction was completed in the challenging market environment arising out of the UK referendum result and represents the sixth successful investment realisation for Ekistics. The investment has delivered a gross internal rate of return (“IRR”) of 32.9% and a gross multiple on invested capital (“MoIC”) of 2.2x for Ekistics’ investors.
Ekistics acquired the Mowbray Court Hotel in an off-market transaction in January 2014 for ca. GBP 17.2million including costs. Following the acquisition, Ekistics carried out a comprehensive refurbishment and repositioning program which comprised the full strip-out, modernisation, rebuilding and redecoration of the interior of the hotel, as well as expansion of its floorplates and an increase in its total room count from 89 to 138 tradeable rooms. This programme was completed with a total development budget of ca. GBP 7.3million. Ekistics’ quantitative and research-oriented analysis of proprietary local trading data for selected comparable Earls Court budget hotels combined with obtaining three separate planning approvals for the Asset enabled Ekistics to deliver back to market the leading hotel of its type in London in terms of both its trading efficiency and fit-out quality.
Ekistics completed the sale of the Asset, following approval of the refurbishment works by building control, to an experienced Middle Eastern hospitality group on 30 June 2016 for ca. GBP 43.5million or ca. GBP 315.1k per key.
John Pedersen, Managing Partner of Ekistics Property Advisors LLP, comments: We are pleased to have advised Ekistics on this investment from its inception to its completion and along the many intermediate steps in between. This project underlines Ekistics’ ability to originate attractive investments and execute complex, transformational business plans across numerous asset classes as well as across the entire capital structure. Moreover, the successful completion of this project highlights the team’s capability to originate opportunistic, value-add investments, delivering back to market assets with strong, cross-investor appeal. We believe this to be essential to delivering investment returns in today’s uncertain environment.
For further information on this investment in particular and/ or Ekistics in general, please contact John Pedersen, Managing Partner of Ekistics Property Advisors LLP on +44 (0)20 7016 3082 or john.pedersen@ekisticsproperty.com