Dalata Hotel Gp Regulatory News (DAL)

Dalata Agrees Sale & Leaseback of Clayton Charlemont Hotel with Deka Immobilien for €65 million

ISE: DHG LSE: DAL

Dublin, 21 April 2020 | Dalata Hotel Group plc ("Dalata" or "the Company") is pleased to announce it has agreed the sale and leaseback of its Clayton Hotel Charlemont in Dublin, Ireland, to Deka Immobilien ("Deka") for a consideration of €65 million. The transaction is expected to be completed by the end of April 2020.

The hotel will be let on a new FRI (fully repairing and insuring) lease for a 35-year term. The agreed initial rent for the property is €3.05 million per annum and will be subject to five yearly rent reviews, index-linked to the Consumer Price Index. As part of the agreement, Dalata will complete at its cost, the final part of the hotel development, which will see the conversion of 38 Charlemont Street into three additional Clayton bedrooms and a Red Bean Roastery Café. These works are expected to be completed in 2020 and will result in no change to the property rent.

The Clayton Hotel Charlemont is a prime 4-star hotel, excellently located, overlooking the Grand Canal, with entrances on Charlemont Street and Charlemont Mall. The hotel currently contains 187 air-conditioned bedrooms, a bar and restaurant, a fitness suite and extensive meeting room facilities. Dalata purchased the site in February 2016 and commenced construction in late 2016. The hotel commenced operations in November 2018 and to date the Company has invested €41.6 million into the purchase of the site and construction of the hotel.

The hotel contributed €4.3 million to Dalata's EBITDAR in 2019, its first full year of operation (PBT €3.3 million). The hotel was valued at €77.4 million on 31st December 2019 on the basis of Dalata owning and operating the asset and therefore retaining all earnings generated at the hotel.

The consideration of €65 million is reflected in the contract by a purchase price of €61.95 million and a rent-free period of one year, equating to €3.05 million. The proceeds of the Transaction will be retained as cash in the Company.

Dermot Crowley, Deputy Chief Executive Business Development & Finance said: "Dalata has always prided itself on the strength of its partnerships and is delighted to collaborate again with Deka in a transaction. Since we entered into an agreement to lease Clayton Hotel Burlington Road in November 2016, our relationship has grown from strength to strength.

We commenced work on this transaction in advance of the COVID-19 crisis. Completing a transaction such as this despite the onset of the crisis demonstrates the commitment of both Deka and Dalata to this partnership and their long-term commitments. The agreed terms for this transaction reflect both the quality of the asset and the strength of Dalata's Balance Sheet. I look forward to working further with Deka in the future.

This transaction is another example of our ability to generate shareholder value through excellence at identifying, securing, developing and operating hotels. The transaction also demonstrates the underlying value of the assets on our balance sheet. The funds will further fortify the Company's considerable cash resources during the current COVID-19 crisis."

This announcement contains inside information within the meaning of the EU Market Abuse Regulation 596/2014.

-ENDS-

About Dalata

Dalata Hotel Group plc was founded in August 2007 and listed as a plc in March 2014. Dalata has a strategy of owning or leasing its hotels and also has a small number of management contracts. The Group's portfolio now consists of 29 owned hotels, 12 leased hotels and three management contracts with a total of 9,208 bedrooms. In addition to this, the Group is currently developing 11 new hotels and has plans to extend two of its existing hotels, with a total of 2,871 bedrooms due to open over the next three years. This will bring the total number of bedrooms in Dalata to over 12,000. For the full year 2019, Dalata reported revenue of €429.2 million and a profit after tax of €78.2 million. Dalata is listed on the Main Market of Euronext Dublin (DHG) and the London Stock Exchange (DAL). For further information visit: www.dalatahotelgroup.com.

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