Fibra Inn, a Mexican real estate investment trust specializing in the hotel industry serving the business traveler, announced the acquisition of Mexico Plaza Leon Centro Max Hotel, located in the state of Guanajuato. This hotel will be converted to the Wyndham Garden brand.
This is the third hotel acquired from Grupo Mexico Plaza, which is a regional hotel chain primarily present in central Mexico. The acquisition price was Ps. 150 million, excluding Ps. 6.9 million in expenses for brand name change. Fibra Inn’s internal committees approved the purchase of this property at a stabilized cap rate of 10.1%. The acquisition was paid in cash with the proceeds from the initial public offering that took place on March 13, 2013.
The conversion of this property to the Wyndham Garden brand will be completed by April of 2014. This property has 126 rooms, will operate under the limited service segment and its operation will be conducted by the Fibra Inn´s Hotel Operator, subcontracting the current Hotel Operator.
Fibra Inn opted to purchase this hotel for the following reasons: Bajio is an area with high economic growth, driven by the automotive industry, with an increase in direct foreign investment that has led to occupancy growth rates and increased demand for groups and extended stay. Leon is a market with a strong hotel demand, as it is the Bajio’s most important city in terms of highest hotel occupancy as reported by the Ministry of Tourism and the largest in the state for its economic activity. Leon in one of the most benefited cities due to the Bajio’s economic growth, capturing the majority of the hotel demand compared with other cities of the area; it is the most complete in services and installations, which makes it a more attractive option compared to other less important cities of the state of Guanajuato. The hotel has experienced a solid performance with the regional Mexico Plaza brand, which is expected to improve even more upon conversion to the international Wyndham Garden brand. It is a hotel focused on suites, which is a segment with longer duration of stay and less competition.
With this acquisition, Fibra Inn has 20 hotels in its portfolio, plus two under development, with a total of 3,976 rooms, of which 3,312 are currently in operation.