MONTERREY, Mexico–Deutsche Bank Mexico, S.A., Banking institution, Trust Division F/1616 or Fibra Inn (BMV:FINN13) (“Fibra Inn” or “the Company”), a Mexican real estate investment trust specializing in the hotel industry serving the business traveler, announced today its decision to exercise its call option to purchase the Hampton Inn by Hilton Hermosillo hotel in the State of Sonora.
The acquisition price was Ps. 175.0 million. An additional Ps. 27.3 million will be destined for a 56-room expansion and Ps. 12.7 million for taxes and acquisition-related expenses, for a total investment of Ps. 215 million. Fibra Inn’s internal management approved the acquisition with a projected stabilized cap rate equal to 10.2%. The payment will be made using funds from the CBFI issuance carried out during November 2014.
The hotel currently has 51 rooms and is in the select-service segment. The hotel operation will be executed by Fibra Inn. The cumulative operating indicators for the hotel are in process of stabilization as this property initiated operations six months ago.
The business fundamentals for the acquisition of this hotel are the following:
- Diversified Industry: The hotel is located in a region with diverse industries, with an important presence of the automotive sector. Companies in the region include Ford Motors, Delphi, Bosch, Tyco Electronics, Bachoco, Bimbo, Thermadyne, Magna, Lear and BASF. Recently, the mining industry saw a comeback, with companies such as Grupo Mexico, Cementos Apasco, Cementos Portland, Mineria Pilares, among others. In addition, the U.S. Consulate centralized its visa operations in this location to serve the Northwestern region of Mexico.
- Leadership Potential: The hotel has the potential to become a leader in the region, as it operates under a globally-renowned brand, and is in a market with a hotel offering that includes 34 mostly independent properties.
- Location: The hotel is strategically located, as it is surrounded by the main industrial parks of the city, which generate an important demand.
- Expansion Potential: The hotel current has 151 rooms and the construction of 56 additional rooms will maximize income and dilute operating costs.
With this acquisition, Fibra Inn has a portfolio of 31 hotels, plus two hotels under agreement, and two under development, with a total of 5,940 rooms; 621 of these are currently under construction.
