REG - Safestay PLC - Acquisition

SafestayAnnouncement

07/06/2024 07:15

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RNS Number : 5940R  Safestay PLC  07 June 2024

7 June 2024

Safestay plc

("Safestay", the "Company" or the "Group")

 Acquisition of Central Property in Brighton

 to be converted into a 220 bed Premium Hostel

 

Safestay (AIM: SSTY), the owner and operator of an international brand of
contemporary hostels, is pleased to announce the acquisition of a freehold
property in the centre of Brighton, from the University of East Sussex, by
Safe Hostels Ltd, a 100% owned subsidiary of and guaranteed by Safestay Plc,
with the intention of converting it into a 220-bed hostel. As part of the
completion process, the charges on the property will be satisfied as the sale
is conditional on this.

 

The Group is expanding and this purchase follows the acquisition last month of
a 100 bed hostel in Cordoba, Spain, the signing of a management contract to
run the resort-based 120 bed Calpe Seafront Hostel in Spain in April and the
acquisition of a 225 bed hostel in Edinburgh in October last year.

 

The building is an attractive Grade II listed end of terrace property located
in the heart of Brighton just 600m from the seafront. Set over five storeys
and totalling 15,285 sq ft, the building is currently vacant. Upon completion,
the Group will seek planning permission to convert the regency-style building
into a hostel offering 220 beds, 200 of which will be in dormitory style
accommodation and 20 in private rooms.

 

The additional cost of conversion is estimated at £1 million and should take
approximately six months. In its first year of trading, sales and EBITDA are
projected to be £750,000 and £250,000 respectively.

 

Safestay Brighton will be the Company's sixth hostel in the UK and the
twentieth for the Group as a whole. A popular tourist destination, Brighton is
an easy journey from London, and has been described as the UK's "hippest
city", attracting over 11 million visitors per year. The hostel is ideally
situated, opposite the Royal Pavilion, a former regency palace and one of
Brighton's most popular tourist destinations. It is also within close range of
The Lanes, the city centre's shopping and leisure district.

 

There is currently a lack of budget tourist accommodation on offer in the
city, providing an opportunity for Safestay to fill a gap in the market with
its premium hostel offer.

 

The total acquisition consideration is £2.275 million and will be funded by
the Group's existing cash resources and a new £1.2 million loan from the
trustees of the Sheldon Pension Fund and Sentpark Capital Limited. The loan
interest rate is 1% per month and is serviced monthly with a repayment date of
18 months after the drawdown date or earlier, subject to the one year minimum
interest period.

Larry Lipman, Chairman of Safestay, said, "I am delighted to announce this
acquisition. It is a unique building and ideally suited to becoming a premium
Safestay hostel. Brighton has an excellent reputation in the UK as both a
seaside getaway and a lively cultural hub, and there is growing demand for
affordable tourist accommodation in the city. Safestay will help fill this gap
in the market by offering premium hostel stays for visitors, in a grand
property, at a low cost. I am confident that this will be another strong
addition to our portfolio."

 

Enquiries:

Safestay plc
 
Tel: +44 (0) 20 8815 1600

Larry Lipman

Liberum (Nomad & Joint Broker)
         Tel: +44 (0) 20 3100 2000

Andrew Godber / Edward Thomas / Josh Borlant

Novella
 
            Tel: +44 (0) 20 3151 7008

Tim Robertson / Safia Colebrook

 

For more information visit our:

Website www.safestay.com (http://www.safestay.com)

Vox Markets page https://www.voxmarkets.co.uk/company/SSTY/news/
(https://www.voxmarkets.co.uk/company/SSTY/news/)

Instagram page www.instagram.com/safestayhostels/
(http://www.instagram.com/safestayhostels/)

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