Hostels operator Safestay has bought a Grade II listed property in Brighton with the view to turn it into a hostel.
The firm plans to turn the vacant 15,285 sq ft building into a 220-bed hostel, comprising 200 dormitory-style beds and 20 beds in private rooms.
It will be Safestay’s sixth hostel in the UK and the 20th overall. It is expected to become operational in 2025.
Safestay chairman Larry Lipman said: “There is growing demand for affordable tourist accommodation in the city. Safestay will help fill this gap in the market by offering premium hostel stays for visitors, in a grand property, at a low cost.”
The £2.3m acquisition price will be funded by the firm’s existing cash resources and a £1.2m loan from the trustees of the Sheldon Pension Fund and Sentpark Capita.
The additional cost of conversion is estimated at £1m and is expected to take six months. In its first year of trading, sales and EBITDA are projected to be £750,000 and £250,000, respectively.
The acquisition comes alongside the company’s financial report for 2023, which showed total revenues, including discontinued operations, increasing by 18% year-on-year to £22.5m.
The average bed rate increased marginally to £23.74 from £23.63 in 2022, with occupancy levels ticking up to 71% from 63%.
Despite that, the company recorded net loss of £1.3m for the year versus a £100,000 loss the previous year.
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