Apex on the lookout for new hotel in city
October 10th, 2006 - Category: HotelAPEX Hotel group is looking to open another hotel in the Capital after funding a major expansion plan with a £54 million sale and leaseback scheme for its two Grassmarket properties.
The firm, which has its headquarters at the city’s Gilmerton Road, said it was looking to expand to have a network of hotels in the UK, including another hotel in Edinburgh and a second one in London.
The move would take the total of Apex-run hotels in Edinburgh up to four.
It added it was also looking at sites in other UK cities which have a similar business market to Edinburgh - a mixture of corporate, leisure and conference work.
The four-star Apex International and Apex City hotels have been sold to Northern Irish property investment company WG Mitchell, which already owns a portfolio of hotels in the Capital.
It emerged this weekend that WG Mitchell, which is headed by Patrick Hegarty and also owns the Radisson SAS hotel on the Royal Mile as well as Bread Street’s Point Hotel, is to make a bid of at least £45 million for Edinburgh’s landmark Caledonian hotel in a similar sale and leaseback arrangement with the Hilton Hotels Corporation.
Scott Davidson, marketing and development director for Apex, said the Grassmarket hotels will continue to operate as usual following last week’s deal.
In the same way, Hilton, which was put up for sale last week, would continue to operate the Princes Street Caledonian if it is bought by WG Mitchell.
The Apex group, which also has one hotel at City Quay in Dundee, and another 130-room facility near Tower Bridge in London, will retain ownership of the Apex European at Haymarket.
Mr Davidson added that the sale would release cash to the group for other investments, but that the hotels would continue to operate as usual.
He said: “It will be business as usual at the Grassmarket Hotels. The new hotels will be in an area with a good mix of demand for corporate, leisure and meetings and events business.
He added: “The money released in the sale and leaseback will allow us to invest elsewhere. We are in a very dynamic situation. We will now always be looking for property to convert, or new build sites. Apex started out in Edinburgh - and both it and London have a core guest base working in finance, law and insurance.”
“We are currently finalising the list of cities we will be targeting at the moment, although Edinburgh and London remain key focuses. There is no limit to how many hotels we could eventually open.”
WG Mitchell, which acquired the Radisson for £43m in 2005, is an increasingly active player in Scotland’s commercial property market and has built up a portfolio of assets worth more than £500m in less than ten years.
The firm would be making its most ambitious deal north of the Border if it snaps up the star-studded Caley, which is said to be Sean Connery’s favourite hotel in Edinburgh.
Acting for Apex in last week’s sale and leaseback transaction were storeys:ssp and Savills and Phillips Lockharts acted as joint agents for WG Mitchell.
