September 04, 2014 – MONTERREY, Mexico – Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciaria F/1616 o Fibra Inn (BMV:FINN13) (“Fibra Inn” or “the Company”), a Mexican real estate investment trust specializing in the hotel industry serving the business traveler, today announced the signature of a binding agreement for the acquisition of 6 hotels, representing a total of 667 rooms under two brands: Casa Grande, a domestically-recognized brand, and Microtel Inn & Suites by Wyndham®, a globally-recognized brand.
With this new acquisition, Fibra Inn’s portfolio will total 29 hotels under operation and 3 hotels under development, with a total of 5,311 rooms, of which 799 are under development. Fibra Inn’s portfolio of properties and rooms has increased by 286% and 193%, respectively, compared with the figures presented in its Initial Public Offering in March 2013.
The amount agreed for the acquisition of the six hotels is Ps. 431.8 million, plus Ps. 48.8 million, which will be used for taxes and acquisition-related expenses. The acquisition will be paid with funds from the bank credit, which will be entered into in the next few days. Following are the details of the purchase of the hotels:
- Properties: 6 (2 Full Service and 4 Limited Service)
- Rooms: 667
- Stabilized NOI: Ps. 50.8 million
- 2013 Annual Occupancy Rate: 61%
- Cap Rate: 10.6% stabilized
- Hotel Operator: Fibra Inn
- Brands: 2 Casa Grande and 4 Microtel Inn & Suites by Wyndham®
Fibra Inn believes that the locations of these hotels are key, as they will allow the Company to diversify its presence in the cities of Chihuahua, Delicias and Culiacan, and will consolidate its operations in locations where it already has hotels under operation, such as Ciudad Juarez and Toluca. All of these locations have an important economic activity, and there is expected growth in the various industrial sectors, including aerospace, automotive, agro industrial, food and beverage, among others.
Following is a detail of the information of each property:
Hotel Casa Grande Chihuahua
Av. Tecnológico 4702, Col. Las Granjas, Chihuahua, Chihuahua, CP 31160
This hotel will be converted to Wyndham Garden®, and conversion expenses are included in acquisition-related expenses.
The business fundamentals for the acquisition of this hotel are the following:
- Market: Chihuahua is a consolidated market with a dynamic and diverse industry and is one of the most important cities in Mexico from an economic point of view.
- Industry: The city has a vast number of industrial parks and an important presence of the aerospace sector.
- Demand: An important portion of demand for this hotel is driven by companies in various sectors, including: Honeywell Aerospace, Textron, Visteon Corporation, Fokker Aerospace, Delphi, Ford, Interceramic, Cementos Chihuahua, Grupo Bafar and American Industries, among others.
- Positioning: The hotel has a strong positioning and presence in the city, which has contributed to its positive performance throughout the years.
- Location: The hotel is located in a premium area, near 7 industrial parks, the city’s business district, and the Autonomous University of Chihuahua.
- Expansion Capacity: The hotel has excess land equivalent to 12,876 m2 with capacity for expansion, or an additional hotel development. Similarly, the property has office space, which contributes to its profitability; as such income was not included in the valuation conducted for the acquisition.
- Synergies: The operation of this hotel is expected generate in operating synergies with Microtel Inn & Suites by Wyndham hotel in Chihuahua.
Hotel Casa Grande Delicias
Av. 6 Oriente 601, Col. Centro, Delicias, Chihuahua, CP 33000
Fibra Inn expects an increased aggressive penetration and geographic diversification by acquiring three properties in the State of Chihuahua.
The business fundamentals for the acquisition of this hotel are the following:
- Market: Growing manufacturing and agricultural industries. Chihuahua is the third most important city in the state and has demonstrated important industrial growth in the past few years.
- Industry: The pharmaceutical, medical, rubber and textile industries have a strong presence in the city.
- Demand: The demand of this location is mainly driven by pharmaceutical representatives from Bayer, Rimsa and Sanofi.
- Positioning: This is the most-recognized hotel in the city, and as such the brand will remain unchanged, by means of a brand licensing agreement. This is a Full Service property, with space for banquets and social events.
- Location: The hotel is located in the heart of the city, near the main shopping centers, financial and government institutions.
Microtel Inn & Suites by Wyndham Chihuahua
Periférico de la Juventud 3304, Col. Herradura LaSalle, Chihuahua, Chihuahua, CP 31214
The business fundamentals for the acquisition of this hotel are the following:
The business fundamentals for the acquisition of this hotel are the following:
- Market: Chihuahua is a consolidated market with a dynamic and diversified industry, and is one of the most important cities of Mexico from an economic point of view.
- Industry: The city has a vast number of industrial parks and an important presence of the aerospace sector.
- Demand: Corporate and industrial clients visiting the city center and industrial areas.
- Positioning: Microtel Inn & Suites by Wyndham® is a globally-renowned brand and has a strong preference among business travelers.
- Location: The hotel is located in the highest commercial growth area in the city. It is located near the Fashion Mall and Plaza del Sol shopping centers.
- Synergies: The operation of this hotel is expected to generate operating synergies with hotel Casa Grande Chihuahua.
Microtel Inn & Suites by Wyndham Culiacan
Blvd. Pedro Infante 2525, Col. Poniente Centro Urbano 3, Culiacan, Sinaloa, CP 80200
The business fundamentals for the acquisition of this hotel are the following:
- Market: Culiacan is a city with a growing market in the agro industrial sector. Additionally, we expect hotel demand growth due to certain interstate agreements that have been signed.
- Industry: There is strong agro industrial and food industry presence.
- Location: The hotel is located in the new part of the city, facing the country club and behind the Angels Hospital, only 8 minutes from the Culiacan airport.
Microtel Inn & Suites by Wyndham Toluca
Blvd. Aeropuerto Miguel Alemán 125, Col. Reforma, Toluca, Estado de México, CP 50200
The business fundamentals for the acquisition of this hotel are the following:
- Market: The Toluca-Lerma industrial corridor is one of the most important in the country. It enjoys great diversity in terms of industries and is a consolidated market. Additionally, it is the capital of the state and has experienced important growth in recent years due to its proximity to Mexico City.
- Industry: There are several industrial parks as well as an important presence of various industrial sectors.
- Demand: Demand at this location is quite diverse due to its wide industrial offering, the Toluca International Airport, the recent opening of roads and highways that make the city an important logistical center due to its connections with the México-Querétaro and Occidente highways.
- Positioning: Microtel Inn & Suites by Wyndham® is a globally-recognized brand and has a good level of brand loyalty among business travelers.
- Location: This hotel is located in the Metepec are of the city, facing the Galer’as Metepec shopping mall as well as Plaza Las Américas. It is located 10 minutes from the airport and is near mayor roadways.
Microtel Inn & Suites by Wyndham Ciudad Juárez
Paseo de la Victoria 4150, Col. Misión de los Lagos, Ciudad Juárez, Chihuahua, CP 32668
The business fundamentals for the acquisition of this hotel are the following:
- Market: Ciudad Juarez is a city with a consolidated business sector spanning several years back. It is one most dynamic border cities that also has a high level of activity.
- Industry: There is a strong maquiladora industry presence as a result of its proximity to the border with the U.S.
- Demand: Demand has strengthened in recent years due to its proximity to the U.S. as well as significant foreign investment flow into the region.
- Positioning: The hotel operates under brand that is recognized and valued greatly but travelers.
- Location: This hotel is located in a premium area near the U.S. embassy and about a mile from the Zaragoza international bridge.
- Synergies: The operation of this hotel is expected to generate operating synergies together with the Holiday Inn Express & Suites Ciudad Juarez hotels.
Note on Forward-Looking Statements
This press release may contain forward-looking statements. These statements that are not historical facts, and are based on management’s current view and estimates of future economic circumstances, industry conditions, Company performance and financial results. Also, certain reclassifications have been made to make figures comparable for the periods. The words “anticipates”, “believes”, “estimates”, “expects”, “plans” and similar expressions, as they relate to the Company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.
