30 Mar 2017 07:00
30th March 2017
easyHotel plc("easyHotel")
Planning permission update for Old Street Hotel, London
easyHotel announces that its appeal against Islington Borough Council's refusal of retrospective planning permission relating to 78 of the 162 rooms at its Old Street Hotel (80 Old Street, London) has been unsuccessful.
This retrospective planning application was identified (and communicated) as a potential risk at the time of the Initial Public Offering (IPO) in June 2014 and was inherited by the current management team in 2015. This retrospective planning application relating to the additional 78 bedrooms was rejected by Islington Council in June 2016 and, since then, the Board has worked closely with Islington Borough Council to come to a beneficial solution for both parties, but has been unsuccessful as the Planning Inspectorate has upheld the Council's policy to protect office space in the borough.
The property was originally acquired by easyHotel prior to IPO, in June 2012, for £10 million as a 92 bedroom hotel. In March 2014 the hotel was extended to 162 bedrooms, without planning permission. The net book value of the property is £13 million and the Board is confident that the current realisable value of the building is significantly in excess of this.
In light of this outcome, easyHotel is now considering its options, including a sale or partial sale of the building to release capital to fund future higher yielding development projects. The Board is confident a full sale of the building should fund the development of at least 500 new rooms in the UK. A partial sale, which would entail the concentration of the hotel operations on the ground, first and second floors, with a sale of the upper floors, would finance the development of a further 170 rooms in the UK. Each option, if pursued, is likely to result in a short term adverse impact to earnings in the current financial year and during the period whilst the capital released is deployed in higher yielding assets.
Enquiries:
easyHotel plc | www.easyhotel.com |
Guy Parsons, Chief Executive Officer |
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Marc Vieilledent, Chief Financial Officer | http://ir.easyhotel.com |
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Investec (Nominated Adviser and Broker) | +44 (0) 20 7597 4000 |
David Anderson |
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Hudson Sandler (Financial PR) | +44 (0) 20 7796 4133 |
Wendy Baker/ Emily Dillon |
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Notes to Editors:
easyHotel is the owner, developer, operator and franchisor of branded hotels. Its strategy is to target the "super budget" segment of the hotel industry by marketing "clean, comfortable and safe" hotel rooms to its customers.
Operating hotels
easyHotel's four owned hotels currently comprise 476 rooms, and it has a further 19 franchised hotels with 1,643 rooms.
Owned hotels:
Old Street (London), Glasgow, Croydon, Birmingham
Franchise locations:
Belgium (Brussels), Bulgaria (Sofia), Germany (Berlin, Frankfurt), Hungary (Budapest), The Netherlands (Amsterdam, Amsterdam-Zaandam, Rotterdam, The Hague), Switzerland (Basel, Zurich), UAE (Dubai), United Kingdom (Edinburgh, London Heathrow, Central London, Luton).
Hotel development pipeline
The Company's committed development pipeline of owned and franchised hotels currently consists of:
Owned hotels:
United Kingdom (Liverpool, Manchester, Ipswich, Sheffield), Spain (Barcelona)
Subject to planning consent: United Kingdom (Leeds)
Franchise hotels:
UAE (Dubai), Germany (Bernkastel-Kues), Portugal (Lisbon), Turkey (Istanbul), UK (Belfast, Reading)
Website: www.easyHotel.com
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