(Alliance News) - Safestay PLC on Monday said that it has bought a freehold property in the centre of Edinburgh, which previously operated as a hostel, for GBP4.3 million.
According to the London-based city centre hostels operator, the property is on Cowgate Street, and is arranged over 6 floors, covering 30,000 square feet in total.
The first three floors previously operated as a hostel, whilst the upper three floors are currently let to two tenants until 2038, generating GBP133,000 in rent per annum.
Safestay told investors that the building would need "general refurbishment" to make it ready to reopen in advance of the key summer market next year.
Once completed, the hostel will offer 225 beds in a variety of room combinations typically ranging from 2 to 8 bed rooms, some with en suite facilities.
"We never wanted to leave Edinburgh for long and are delighted to return and link up with our other Scottish site in Glasgow... The property is superbly positioned right in the centre with easy access to all the main attractions and we feel confident, knowing this market as we do, that it will be a strong contributor to the group," said Chair Larry Lipman.
"Our trading performance over the last 18 months since we have been allowed to trade post-pandemic has shown that our market is in good health. Demand and pricing have demonstrably increased which will increasingly benefit us as we expand the portfolio with excellent sites such as this."
Safestay shares were trading 2.0% lower at 24.00 pence each in London on Monday morning.
By Holly Beveridge, Alliance News reporter
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Safestay (SSTY)