Mon 23rd Sep 2019 - Whitbread makes second German hotel portfolio acquisition Whitbread makes second German hotel portfolio acquisition: Whitbread has acquired a portfolio of three independent hotels in Germany from a private individual operating under the brand Acomhotel for an undisclosed sum. It is Whitbread’s second acquisition in Germany and is part of a “long-term investment plan in a highly attractive market”. Whitbread said the return on capital from the acquisition is expected to be above its weighted-average cost of capital. The portfolio consists of two leasehold hotels that are open and trading, in Nuremburg and Munich, with the right to purchase the freehold in seven and 13 years respectively. A further leasehold hotel is under construction, in Stuttgart. The three locations comprise 482 bedrooms in total. Whitbread said all three hotels are in strong locations in German tier one cities, which match its network planning targets. It added they are readily convertible to the Premier Inn format, with similar room sizes and comparable ground-floor space. The hotels will continue to trade under the Acomhotel brand until refurbishment work is complete. Once converted the hotels will relaunch as Premier Inns, probably in early 2020. Mark Anderson, Whitbread managing director property and international, said: “This marks another important step in our ambitious growth plan for Germany as part of our strategic priority to focus on our strengths to grow internationally. We have accelerated our investment in Germany through a mix of organic expansion, supported by focused and ongoing mergers and acquisitions activity. We are building a strong counterparty reputation in Germany in freehold and leasehold property transactions as well as facilitating exit for independent operators. We look forward to welcoming the Acomhotel team and providing even more attractive Premier Inn hotels for domestic German travellers.” Whitbread said the German hotel market was about 30% larger than the UK’s and is highly fragmented, with 74% of market share held by smaller independents. It added: “The high degree of domestic business travel also makes the German market extremely attractive for the Premier Inn short-stay, domestic traveller-focused proposition. Through addition of new high-quality capacity offered to customers at attractive prices, Premier Inn is expected to win market share from independent competitors and develop a successful business of scale.” Premier Inn has three hotels open in Germany, all of them “performing in line with expectations”, in Frankfurt, Hamburg and Munich. A further 40 hotels are in the committed pipeline across 16 key cities in Germany.