Hotel Portfolio Sale

Fibra Inn Acquires 6 Hotels for Ps. 431.8 Million

Fibra Inn 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.

Fibra Inn

Deutsche Bank México, S.A., Institución de Banca Múltiple, División Fiduciaria F/1616 o Fibra Inn (BMV:FINN13), 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®
                                           
Hotel     City     Type     Rooms     Price    

Acquisition

Expenses

    Cap Rate     Operator
                        (Ps. million)           2015      
Casa Grande *     Chihuahua     Full     115     105.5     19.2     10.0%     Fibra Inn
Casa Grande     Delicias     Full     89     71.3     7.0     11.2%     Fibra Inn
Microtel Inn & Suites by Wyndham     Chihuahua     Limited     108     73.0     6.3     10.9%     Fibra Inn
Microtel Inn & Suites by Wyndham     Culiacán     Limited     113     55.0     5.2     10.9%     Fibra Inn
Microtel Inn & Suites by Wyndham     Toluca     Limited     129     66.0     5.8     10.4%     Fibra Inn
Microtel Inn & Suites by Wyndham     Cd. Juárez     Limited     113     61.0     5.3     10.4%     Fibra Inn
Total                 667     431.8     48.8            
 

*Planned conversion to Wyndham Garden®, amount is included in acquisition-related expenses.

The following are the hotel indicators for 2013:

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 ChihuahuaHotel 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:

  • 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 Galerías 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.

Fibra Inn is a Mexican trust formed primarily to acquire, develop, operate and rent a broad range of hotel properties in Mexico. Headquartered in Monterrey, Fibra Inn has a portfolio of high-quality real estate properties aimed at the business traveler and that are geographically-diversified in 14 states throughout Mexico, with 29 hotels under operation and 3 more under development. The Company has signed Franchise Agreements with IHG to operate its global brands, including: Holiday Inn, Holiday Inn Express and Holiday Inn Express & Suites; with Wyndham Hotel Group to operate its global brand Wyndham Garden and Microtel Inn & Suites by Wyndham®. Additionally, it has licensing agreements and brand usage agreements with Hilton to operate its brand Hampton Inn by Hilton and with Starwood Hotels & Resorts Worldwide to operate the Aloft brand. Additionally, Fibra Inn has agreements with IHG, Marriott International and Wyndham Hotel Group for development of properties. These hotels enjoy some of the industry’s top loyalty programs and, offer attractive hotel options for business travelers. Fibra Inn recently listed its Real Estate Certificates (Certificados Bursátiles Fiduciarios Inmobiliarios or “CBFIs”) on the Mexican Stock Exchange and trades under the ticker symbol “FINN13”.



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