Whitbread plc (LON:WTB), the owner of Premier Inn and Costa Coffee, has bought a portfolio of 19 hotels in Germany as part of its international expansion plan.
The company purchased the hotels from Foremost Hospitality Group for an undisclosed sum, increasing its pipeline to 31 hotels across 15 cities. The hotels are expected to be open by the end of 2020.
Whitbread said the acquisition was an important step in accelerating its international strategy and in replicating Premier Inn's UK success in a key strategic market.
Germany expected to deliver strong returns
The German hotel market is 35% larger than the UK, it said.
“We believe Germany has many of the structural growth drivers that have underpinned the success of Premier Inn in the UK and that Germany is a market that will deliver strong returns in the future,” said chief executive Alison Brittain.
“This acquisition mirrors the strategic opportunity that we identified with Costa in China, where we recently bought out Costa's South China joint venture partner.”
READ: Whitbread sales slow on Costa decline but break-up speculation lifts shares
The deal in Germany includes 13 leasehold hotels, which are already open and trading, along with six committed pipeline leasehold hotel, the majority of which will open over the next two years.
Whitbread said the transaction and consideration are conditional on receiving consent from landlords to rebrand the hotels and on the termination of franchise agreements with the current franchisor.
Further expansion planned
The group will continue to explore options to expand further in Germany through a mix of freehold property developments, leasehold sites and acquisitions of small existing hotel portfolios.
Premier Inn currently has one hotel open in Frankfurt and another 11 hotels in its committed pipeline across Germany, including a development in Munich.