Funding of Freehold Acquisition

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 with Bank Hapoalim B.M. to fund the acquisition of the freehold interest in Park Plaza London Waterloo (the "Hotel"), as originally announced on 2nd March (the "Acquisition").

The new £136,450,000 facility has an initial two year term, with the right to extend subject to certain conditions.

The new facility agreement is subject to certain conditions precedent being fulfilled, and funding is expected to take place in the coming months. The agreement includes financial covenants based on loan to value and interest service, typical with this type of loan and the facility will be secured, inter alia, by a first legal charge over the Group's interests in the Hotel.

The facility bears a floating interest rate, of which c.90% will be hedged. The final all-in rate will be announced at completion once hedging has been finalised. Whilst the rate is expected to exceed the Group's current average cost of debt, the future lease payments under the original structure - under which the Hotel carried a £210m lease liability - were projected to rise above the anticipated cost of servicing the new £136.45m facility. As such, this financing is both strategically and financially attractive and is expected to be accretive to earnings over the facility term.

The combination of this transaction and the Acquisition has served to both increase the Group's freehold exposure, providing protection from expected material future rental uplifts, and to further simplify and de-risk the Group's balance sheet position.

Daniel Kos, Chief Financial Officer of PPHE, commented:

"We are pleased to have entered into a new facility with Bank Hapoalim, which has been a strategic partner for several decades, enabling us to acquire the freehold interest in our flagship Park Plaza London Waterloo hotel, located on London's thriving South Bank.

Opportunities to acquire marquee London assets like this do not come along often, so we are delighted to have full ownership over the property. Over the term this new debt facility is expected to be earnings accretive, removing a growing future lease liability and reducing our exposure to inflation risk.

Importantly, the transaction further simplifies and materially de-risks our balance sheet, building on the progress we have made across a number of recent transactions.'