1 August
2024
Safestay
plc
("Safestay", the
"Company" or the "Group")
Lease Surrender for
Only Unprofitable Property
Safestay PLC (AIM: SSTY), one of Europe's
largest hostel groups, announces that its wholly owned subsidiary,
Equity Point Prague sro, has taken the decision to sign a binding
agreement to surrender the lease for its 52-room hotel in Vienna
(the "Hotel") to the Hotel's landlord, Hotel La Prima GmbH & Co
KG (the "Surrender Agreement"). This strategic decision removes the
only loss-making property in Safestay's portfolio and will enable
the group to redeploy capital where there are stronger
returns.
In October 2018, Safestay signed a 10-year
lease for the Hotel with the intention of converting the property
into a hostel. Since then, the Company has not been able to secure
the licence required to do so and, as a result, the Hotel has not
benefited from the same synergies and economics of the Group's
wider hostel portfolio, resulting in a loss.
In the 12 months to 31 December 2023, the Hotel
made a loss of £376,000 and had net liabilities of £506,000,
excluding the intercompany debt.
Under the terms of the Surrender Agreement the
total consideration payable by Safestay is €532,000, representing
historic COVID-deferred rent. BOSU SBS Hotel GmbH, the new tenant
for the Hotel, has agreed to pay Safestay €275,000, which will be
used by the Company to pay down the consideration. In addition, to
complete the transaction Safestay will pay a further €107,000 from
a historic rent deposit account and €150,000 from the Company's
existing cash resources to settle the outstanding
balance.
Larry Lipman, Chairman of Safestay, said:
"We are pleased to have successfully come to an
agreement to exit the lease of the Group's Vienna
property.
Whilst the site's fundamentals align
with our portfolio criteria, without the correct licence to become
a hostel it could never reach its potential within the
Group.
Therefore, this is a suitable and
strategic exit for us, removing our only loss-making property and
enabling us to redeploy our capital to seek new opportunities with
strong returns.
We continue to execute against our
growth strategy, with recent acquisitions in Brighton and Córdoba,
Spain, as we focus on exploiting the significant growth
opportunities available to us as an established international brand
in the highly fragmented and significant global hostel market."
Enquiries:
Safestay
plc
Tel: +44
(0) 20 8815 1600
Larry Lipman
Shore Capital
(Nomad & Broker)
Tel: +44 (0) 20 7408 4090
Tom Griffiths / Harry Davies-Ball
Hudson Sandler
(Financial
PR)
Tel: +44 (0) 20 7796 4133
Alex Brennan / Lucy
Wollam
safestay@hudsonsandler.com
For
more information visit our:
Website
www.safestay.com
Vox Markets page
https://www.voxmarkets.co.uk/company/SSTY/news/
Instagram page
www.instagram.com/safestayhostels/
Notes to
Editors
About Safestay
PLC
Safestay PLC is one of
Europe's largest hostel groups, operating in the fragmented and
fast-growing global hostel market that is expected to be worth
$8.9bn annually by 2027*.
Safestay's portfolio of 18 premium hostels and
two hotels offer guests both private and shared rooms in
destination cities across the UK, Spain, Belgium, Czech Republic,
Germany, Greece, Italy, Poland, Portugal, and Slovakia.
The Group currently offers more than 3,250 beds
across its locations and served over 400,000 travellers in the
first half of 2023, a 41% increase against the prior
year.
Safestay's mission at each of its locations is
to provide a safe, inclusive, and enjoyable space that caters to
the needs of different travellers. Its properties offer first-class
locations and thoughtful designs that cater for the different needs
of travellers, from digital nomads to backpackers and from families
to group travellers.
The company's strong growth momentum continues
and during 2024 has announced the acquisition of a freehold hotel
property in Brighton and a hotel in central Cordoba, Spain, with
the intention of converting these into a 220-bed hostel and 100-bed
hostel respectively, as well as the signing of its first management
contract for a 120-bed hostel on Spain's Costa Blanca.
https://www.safestay.com/
*Source -
Markets and Research, August 2022
Safestay's pan-European locations
include:
·
Athens
Monastiraki, Greece
·
Barcelona
Gothic, Spain
·
Barcelona Passeig de Gracia, Spain
·
Berlin
Kurfurstendamm, Germany (hotel)
·
Bratislava Presidential Palace, Slovakia
·
Brighton, UK (in development)
·
Brussels
Grand Place, Belgium
·
Glasgow
Charing Cross, UK
·
Edinburgh
Cowgate, UK
·
London
Elephant & Castle, UK
·
London Kensington Holland Park, UK
·
Lisbon
Bairro Alto, Portugal
·
Madrid
Central, Spain
·
Pisa
Centrale, Italy
·
Prague
Charles Bridge, Czeck Republic
·
Warsaw
Old Town, Poland
·
York
Micklegate, UK