Acquisition of Park Plaza London Waterloo freehold

PPHE Hotel Group, the international hospitality real estate group which develops, owns and operates hotels and resorts, is pleased to announce that it has entered into an agreement to repurchase the freehold interest in Park Plaza London Waterloo (the "Property").

In June 2017, following the Group's development and opening of the 494-room Park Plaza London Waterloo hotel, PPHE entered into the initial sale and leaseback transaction whereby it sold its interest in the hotel for £161.5 million and entered into a 199-year lease subject to an initial annual rent of £5.6 million with future annual inflation adjustments. The annual rental obligation currently is £7.3 million, rising in line with RPI.

The freehold acquisition is for a total consideration of £147.9 million, of which £136.5 million is intended to be funded by a new debt facility which the Group expects to finalise prior to completion and which will be secured on the freehold and long leasehold interest in the Property. The remaining balance is to be settled from the Group's existing cash resources. The transaction is expected to close in the coming months.

Greg Hegarty, Co-CEO of PPHE, commented:

"This transaction is another excellent illustration of PPHE's approach to capital allocation and capital recycling. We continuously assess and examine opportunities across the portfolio to help drive returns.

At the time, the initial sale and leaseback represented an attractive opportunity to release capital from this asset to reinvest in our broader development pipeline. Similarly, the purchase of this freehold interest is a good use of capital, protecting the Group from future rental uplifts, whilst increasing the freehold exposure in our portfolio. As freehold owner, we will have increased strategic optionality on refurbishment and development, as well as benefiting from potentially better financing terms and full asset value capture."

Daniel Kos, Chief Financial Officer & Executive Director Inbar Zilberman, Chief Corporate & Legal Officer Robert Henke, Executive Vice President Commercial Affairs