Real estate investment manager Tristan Capital Partners’ Episo 6 fund announced on Tuesday that it is investing £420 mln (€502 mln) to acquire a majority share in Raag Hotels Limited, owner of the Point A Hotels brand with assets in the UK and Ireland.
Current shareholder Queensway, a family-run operator of real estate in the hospitality sector owned by Naguib Kheraj, will remain as minority partner.
It will co-invest and act as hotel operator, asset manager and development partner for future sites.
The portfolio of budget boutique brand Point A Hotels consists of ten hotels with 1,520 rooms in strategic city centres near transport hubs in central London, Glasgow, Edinburgh and Dublin.
Commenting on the deal, Kristian Smyth, executive director for investments at Tristan Capital Partners, said it ‘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’.
According to him, ‘the 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’.
For his part, Queensway CEO Naushad Jivraj pointed out that the new partnership will help ‘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’.
He recalled that under Queensway Hotels management, the Point A Hotels brand ‘has developed a high-quality product at great value, generating positive customer feedback resulting in strong occupancy levels’.
Both shareholders have committed significant additional equity to fund further growth to double the size of Point A Hotels in the medium term, with HSBC and NatWest retained as lenders.
Following the arrival of the Tristan fund, global charitable foundation Wellcome Trust will exit the shareholding structure.
Savills advised Episo 6 on the deal.