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Safestay acquires Barcelona asset from Equity Point
Hostel group Safestay has acquired another Barcelona property from Equity Point Hostels, taking its total presence in the city up to nearly 600 beds.
Safestay purchased the Barcelona Centric, situated in one of Barcelona's most desirable avenues, Passeig de Gràcia, from Equity Point for a total of 3m.
Offering 340 beds, Centric was consistently favoured by visitors to the city and when including Safestay's other centrally located hostel, and its beachfront location, the group now offers 594 beds in "easily one of the most visited cities in Europe".
The consideration for the acquisition of Centric was set to be satisfied from the group's existing cash resources, with an initial payment of 700,000 and then four payments of 575,000 spread over the coming four years.
The property is held on a lease for a total of 15 years, 3 years of which are fixed, followed by tenant only options to extend, and for the year ended 31 December, the hostel generated sales of 2.4m and an EBITDA of 574,000.
Larry Lipman, chairman of Safestay, said, "We know the Barcelona market well and we know there is high demand for our premium hostel offer. We are therefore fully confident of integrating this new site into the group and using it to expand our presence in what is a very popular city."
"The global hostel market is booming and we are benefitting from this increase in awareness and popularity. Importantly, we have in place the operational strength to support a much larger business across multiple geographies and we look forward to making further significant progress in 2018," he added.
As of 0920 GMT, shares had declined 1.88% to 47.10p.