FibraHotel (BMV: FIHO 12), the first real estate investment trust specialized in urban business-class hotels in Mexico, announced that today it closed the acquisition of two hotels in Xalapa, Veracruz, adding a total of 245 rooms (227 in operation). FibraHotel acquired the 119-room Fiesta Inn Xalapa hotel and the One Xalapa hotel which currently has 108 rooms and will be expanded by 18 rooms, reaching a total of 126 rooms. Both hotels will continue to be operated by Grupo Posadas under their existing brands.
The transaction was paid with cash for Ps. $212,917,176.0 (two hundred twelve million nine hundred seventeen thousand one hundred seventy-six Pesos 00/100). FibraHotel will invest an additional Ps. $8,000,000.0 (eight million Pesos 00/100) to add 18 rooms to the One Xalapa hotel and renovate the public areas of the Fiesta Inn hotel during the second half of 2014. Additionally there is a potential “earn-out” payment if the Fiesta Inn Xalapa surpasses an EBITDA threshold in 2014. The investment was done at a 10% cap rate.
The Fiesta Inn hotel and One Xalapa are located in a same complex, in Carretera Xalapa – Veracruz, km 2.5, esquina Boulevard Vista Hermosa, Fraccionamiento Las Animas, 91190, Xalapa, Veracruz, one of the best locations in the city across from the main hospital in the city, and very close to the largest shopping center in the city, universities and to government offices.
The city of Xalapa is the capital of the State of Veracruz and the headquarters of the State Government, so this transaction represents a strategic investment focused both on the current situation of the location, as in the expected growth in the area by the recently approved energy reform.
With this acquisition, FibraHotel´s portfolio consists of 50 hotels with 6,883 rooms of which 43 are in operation (6,115 rooms) and 7 in different stages of development.
FibraHotel is a Mexican trust created primarily to acquire, develop and operate business-class hotels in the limited service, selected service, full service and extended-stay segments. Our objective is to provide attractive returns to our CBFI holders, through stable cash distributions and the appreciation of our real estate assets. Also, we will aim to have a high quality hotel portfolio, through the affiliation to different hotel brands and renowned operators, as well as geographic and segment diversification.
Under Mexican laws, Fibras must invest at least 70% of its assets in real estate for lease, among other requisites. Additionally, Fibras must distribute in cash at least once a year 95% of taxable income to its CBFI holders. Such characteristics, together with a solid performance of the real estate market in Mexico and a team with over two decades of real estate and hotel experience, make FibraHotel an attractive investment vehicle.
FibraHotel is internally managed by Fibra Hotelera, S.C., and is externally advised by Administradora Fibra Hotelera Mexicana, S.A. de C.V whose key executives have extensive experience in the development and operations of commercial real estate and hotels in Mexico.