Tristan Capital Partners’ latest opportunistic fund European Property Investors Special Opportunities 6 (EPISO 6) has formed a partnership with Queensway to acquire a majority stake in Raag Hotels Limited which owns Point A Hotels in a £420 million transaction.
The transaction will provide a full exit for the Wellcome Trust, whilst the other current shareholders, Queensway, a company associated with the Jivraj Family, and a company owned by Naguib Kheraj will remain as minority partners.
The Point A portfolio comprises 1,520 rooms in 10 hotels, with 80% of its value in London.
Tristan said the independent budget boutique brand provides EPISO 6 with an immediate footprint across the best markets in the UK and Ireland in strategic locations near transport hubs.
Under the new partnership, Queensway will co-invest and act as hotel operator, asset manager and development partner for future sites.
The shareholders have committed significant additional equity to fund the next phase of growth of Point A Hotels with the goal of doubling the size of the estate over the medium term.
The existing banks, HSBC and NatWest are retained as lenders.
Kristian Smyth, Executive Director, Investments at Tristan Capital Partners, said: “The acquisition of this hotel platform reflects our wider hotel strategy of partnering with best-in-class operators in market segments that are resilient to market volatility with substantial growth potential.
“All the hotels are strategically situated in city centres within vibrant neighbourhoods, close to demand generators including business districts, tourist attractions and event venues.
“Our ambition is to materially grow the platform in the UK and Ireland alongside the Queensway team with 2-3 acquisitions per year with the objective of doubling the portfolio in the medium term.”
Naushad Jivraj, CEO, Queensway said: “We are delighted to form this new partnership with Tristan Capital Partners’ fund to continue to significantly grow the Point A platform to provide consumers with a budget boutique offering, in great city centre locations with personal and memorable service. Under the management of Queensway Hotels, the Point A Hotels brand has developed a high-quality product at great value, generating positive customer feedback resulting in strong occupancy levels.
“Wellcome Trust have been an excellent partner to work with over the past eight years and we are pleased that this transaction has produced a successful outcome for them.
“We are excited for the next chapter of the Point A Hotels story as we, together with Tristan, continue to develop our product, brand and service to the ever-evolving needs of our consumers.”
Lisha Patel, Managing Director, Investment Division at the Wellcome Trust said: “Our participation in the significant growth and evolution of the Raag Hotels business has produced strong returns over the life of our investment. The strength and quality of the Point A Brand, the hotel portfolio and the Queensway management team attracted very keen interest from institutions to acquire our shareholding and we are confident the business will continue to perform well and deliver excellent guest experience under new ownership.”