Hostel operator Safestay has increased its presence in Scotland after agreeing a £3 million-plus acquisition of a Glasgow hotel.
The takeover of the site, which is currently operating as Best Western Glasgow City Hotel, will add to the group’s flagship hostel in Edinburgh.
Safestay, which is quoted on London’s Alternative Investment Market, said it was buying the freehold interest in the 52-bedroom Glasgow hotel for £3.15m. Completion of the acquisition is expected to take place on 21 October.
The deal is part of the group’s strategy to create a “pan-European network of premium hostels in leading cities”.
Located on Elmbank Street in the heart of Glasgow, the hotel is a short walk from Charing Cross railway station. The firm noted that outline planning permission already exists for conversion into a 200-bed hostel.
The property is freehold and in the 12 months to 31 January generated revenues of £820,000, Safestay added.
The total consideration of £3.15m will be satisfied in cash from the group’s existing cash resources.
Following the latest acquisition, Safestay’s portfolio now consists of five sites in the UK, in Glasgow, Edinburgh, York and two in London, and ten sites in mainland Europe – Brussels, Lisbon, Madrid, Paris (under construction), Pisa, Prague, Vienna and three in Barcelona. In total they provide some 3,500 beds.
Chairman Larry Lipman said: “Given the success of our 615-bed Edinburgh hostel and now considered to be a flagship site within our portfolio, we have been looking for sometime to find the right site in Glasgow.
“We are therefore very pleased to have secured this excellent building which is ideally suited to being a hostel, providing an excellent base to explore Glasgow from. We very much look forward to Safestay Glasgow becoming part of the portfolio.”