MONTERREY, Mexico--(BUSINESS WIRE)--Deutsche Bank Mexico, S.A., Banking institution, Trust Division F/1616 or Fibra Inn (BMV: FINN13, ADR OTC: DFBRY) (“Fibra Inn” or “the Company”), the Mexican real estate investment trust specializing in the hotel industry serving the business traveler with global brands, announced that it has signed a binding agreement for the acquisition of the Best Western Valle Real Hotel located in the city of Monterrey, in the state of Nuevo Leon. The hotel currently has a total of 85 rooms and operates in the limited-service segment.
The investment is for Ps. 67.0 million, plus Ps. 3.7 million in taxes, acquisition-related expenses and corresponding VAT expenses. The transaction will be paid using the resources obtained from the bank loan. The Company expects a projected cap rate of 9.6% for 2016. The hotel will be operated by the Hotel Manager, a Fibra Inn related party, and with the significant synergies at this location.
Oscar Calvillo, Fibra Inn’s Chief Executive Officer, stated: “The agreement we announced today expands the range of our portfolio and reiterates our position of undisputed leadership in Mexico as owner of business hotels with global brands. This agreement is a good example of the efficiency of the acquisition team to acquire hotels at the right prices in strategic areas.”
The business reasons for Fibra Inn to sign this binding agreement are the following:
- U.S. Consulate: This is the closest hotel to the new U.S. Consulate in Monterrey, which is one of the nine U.S. consulates in Mexico and the fifth most-active in the world in terms of visa issuances. This consulate covers the states of Tamaulipas, Coahuila, Zacatecas, Durango, San Luis Potosi and Nuevo Leon, with a total of 400 thousand annual requests.
- Industrial Sector Strength: Industrial activity in the Santa Catarina industrial area is the result of the high business activity in Monterrey.
- Land Value: The area in which the hotel is located has high real estate value, which is an entry barrier for other hotel investments.
- Weekend occupancy: The hotel is located next to event venues that generate high demand during weekends, which keeps occupancy rates stable.
This property is located in the heart of the city, 10 minutes away from the U.S. Consulate, 2.5 kilometers away from the Spanish Consulate and only a few minutes from the Santa Catarina industrial area. In 2015, the property reached 63% occupancy, an average daily rate of Ps. 869 and a RevPar of Ps. 545.
To date, Fibra Inn has a total portfolio of 43 properties; of which 31 hotels are in operation and two are under a binding agreement. The total is 7,112 rooms, of which 6,654 rooms are operating, 237 are under a binding agreement and 221 are currently under construction.
About the Company
Fibra Inn is a Mexican trust formed primarily to acquire, develop, operate and rent a broad range of hotel properties in Mexico aimed at the business traveler. The Company has signed franchise, license and brand usage agreements with international hotel brands for the operation of global brands as well as the operation of national brands. Additionally, the Company has development agreements. These hotels enjoy some of the industry’s top loyalty programs. Fibra Inn trades its Real Estate Certificates (Certificados Bursátiles Fiduciarios Inmobiliarios or “CBFIs”) on the Mexican Stock Exchange under the ticker symbol “FINN13”; its ADR trades on the OTC market in the U.S. under the ticker symbol “DFBRY”.
For more information, please visit: www.fibrainn.mx.
Note on Forward-Looking Statements
This press release may contain forward-looking statements. These statements are 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.
