Tune Hotel in Newcastle to receive easyHotel treatment
Updated : 12:44
Owner, developer and operator of so-called ‘super-budget’ hotels easyHotel has agreed to take over the 104-room Tune hotel in Newcastle, it announced on Wednesday.
The AIM-traded firm said the hotel at Proctor House, 23-29 Side, Newcastle, is centrally located between the city centre and the Quayside, and an eight-minute walk from Newcastle Central Station.
It said the property, which opened as a hotel in 2014, is in “excellent” condition, and would open as an easyHotel next month following minor rebranding works to the building.
Newcastle would be the group's second leased site, with the hotel let on a 25-year fully repairing and insuring lease at an annual rent of £442,000.
As it previously outlined, while the board remained focussed on accelerating the group's expansion through owned and franchise hotel development, it would consider specific leased sites providing they enable the group to build a footprint in “strategic gateway locations”.
The board said it applies strict due diligence when assessing lease opportunities, stress testing a minimum risk-adjusted rent cover in line with hotel sector standards.
It said that selective approach to leased opportunities would enable the Company to increase the number of hotel rooms under its direct control, grow its earnings at a lower capital cost and maintain the group's blended return on capital employed target of 15%.
“This is an excellent opportunity to establish a footprint in the vibrant and popular city of Newcastle,” said easyHotel CEO Guy Parsons.
“The 104 rooms will require minimal work to bring them in line with our brand and we will open the new easyHotel Newcastle next month.”
Parsons said it had been a year of accelerated growth for the group, which he believes validated the board’s strategy of offering comfortable, affordable accommodation in key tourist and business locations in the UK and internationally.
“The board looks forward to announcing further opportunities for the easyHotel brand as we continue to expand our development pipeline.”