BANGKOK, 22 April 2021: S Hotels and Resorts Public Company Limited (SET: SHR) has disclosed it will shed underperforming hotel assets in the UK as part of its strategy to optimise its portfolio and maximise returns.
In February 2021, S Hotels & Resorts invested THB560 million to purchase additional 50% stakes in 26 of its portfolio of 29 UK hotels, raising its total ownership of those properties to 100%.
The hospitality arm of Singha Estate PCL (SET: S), S Hotels and Resorts, made the announcement Wednesday on what it described as a “limited divestment strategy.” It will start with the sale of the 73-key Mercure Newbury Elcot Park S Hotels & Resorts valued at UKP4.25 million (THB182 million).
In addition, the company plans to dispose of up to five other UK hotels in the portfolio, which have been identified as non-core assets. Proceed from sales will be used to reinvest in the renovation of core hotel assets in the portfolio to enhance profitability potentially.
S Hotels & Resorts CEO, Dirk De Cuyper, said it was pursuing a strategy to dispose of some assets that have a limitation on profit generation but potentially can be sold at market price.
“The company targets the sale of four to six hotels which fall under these criteria and is currently in negotiations for potential buyers. The transactions are expected to be completed in 2021-2022,” according to the CEO’s statement.
He added: “Strategically, we believe the optimal number of hotels in this portfolio should be around 20 to 21 hotels and in the medium, to long run we wish to uplift the EBITDA performance of this portfolio back to the peak level of UKP18 million (THB720 million equivalent).
S Hotels & Resorts believes that ongoing international travel restrictions and the UK’s successful vaccination programme will drive domestic tourism demand in 2021, followed by the recovery of inter-regional travel from 2022.
(Source: News S Hotels & Resorts)