Boutique Edinburgh hotel The Bonham has new owner
EDINBURGH boutique hotel The Bonham has been snapped up by a US investor group led by American fund manager Richard H Driehaus,
The off-market deal means the 49-bedroom hotel, spread over three townhouses in the city’s west end, has changed hands twice in as many years.
The Bonham was picked up by US giant Starwood Capital Group as part of its multimillion pound acquisition of veteran hotelier Peter Taylor’s Townhouse Hotel Company in January 2015. That deal also saw Starwood acquire the fivestar Blythswood Square hotel in Glasgow.
The value of the latest deal was not disclosed but it is likely to have run into the multi-million pound bracket, with the sale believed to have achieved the highest price per room commanded in any Edinburgh hotel sale this year.
Deals completed in the city this year include G1 Groups’ acquisition of The Scotsman hotel on North Bridge.
Kerr Young of property firm JLL, which acted for Starwood in the sale, said: “It is no surprise that the sale of The Bonham attracted significant interest from both domestic and international buyers, having long been regarded as one of Edinburgh’s most stylish and iconic hotels. Edinburgh currently boasts the strongest UK hotel market outside of London, with a thriving corporate, finance, tech and leisure market, attracting 35 million visitors each year.” SHARES in Stagecoach touched a seven-year low yesterday as the Perth-based transport giant booked an £84 million exceptional charge against its loss-making Virgin Trains East Coast rail service.
Underlying pre-tax profits fell 15.2 per cent to £159m, while revenue grew more slowly than in recent years, climbing 1.8 per cent to £3.9 billion.
This came amid “subdued” conditions in the UK rail and bus sectors, including macroeconomic and political uncertainty, and increased terrorism concerns.
Revenue growth on the Virgin Trains East Coast (VTEC), which it runs with Virgin Group, was described by chief executive Martin Giffiths as “considerably below” what Stagecoach assumed in its 2013 bid for the franchise.
This business is expected to be loss-making for each of the next two years. In addition to the £84.1m charge in anticipation of these losses, Stagecoach booked a £44.8m impairment of intangible assets relating to the franchise.
Because revenue has been impacted by factors beyond the control of the operator, including changes to planned infrastructure spend, Stagecoach has opened talks with the Department of Transport to alter the commercial terms from 2019 until the franchise ends in 2023.
“We are not on risk for changes to infrastructure or the changes or delays in the introduction of the new trains, so the assumptions we were asked to make for a timetable, what this meant for revenue, for [premiums paid to the Government],
Losses are expected on the East Coast Main Line, operated by Stagecoach and Virgin Group.
is going to change,” said Mr Griffiths.
He added that Stagecoach had fulfilled its obligations on the route, and challenged the government to ensure the risk taken on by the private sector was commensurate with reward.
“We do have contractual protection,” he said. “[But] more recent franchises we feel … that protection is being eroded and we need to see as we go forward with bids that that risk allocation is right.”
He said the way operators have historically forecast demand is changing, and referring to the four bids it potentially has coming up, he said: “We as a group will need
to be satisfied that the risk and reward is still worth doing in the UK. I think it will be but there is still a bit of work to do on that.”
Overall, Stagecoach said it remained cautious on the shortterm outlook for revenue trends in the UK, but that the long-term outlook was positive. Its UK rail business saw revenue grow 1.5 per cent to £2.2bn.
In August the company will end operation of the South West Trains franchise, but has been shortlisted for the new East Midlands and South Eastern franchises, and has formed a joint venture with Virgin and SNCF to bid for the West Coast Partnership
franchise, which will ultimately include new high-speed connections.
Across the UK, revenue growth in the franchised rail market remains low by historical standards. This was replicated in the bus market, with revenue down 1.7 per cent to £1bn regionally, and 1.4 per cent to £263m in London. Its megabus Europe division saw revenue climb 9.8 per cent to £20.2m while the North American business fell 2.4 per cent to £489m. A final dividend of 8.1p boosted the total dividend by 4.4 per cent to 11.9p.
Stagecoach share price closed down six per cent at 191.1p. THE cost of decommissioning North Sea oil and gas facilities could total up to £83 billion, it has been estimated.
The figure comes from a regulatory report that highlights the potential for the UK to become a world leader in decommissioning but which may heighten fears about the implications for taxpayers.
The report from the Oil and Gas Authority represents the latest attempt to estimate the bill the industry will face for clearing up in the North Sea as hundreds of fields reach the end of their lives in coming decades.
The authority has calculated there are more than 250 fixed installations, over 250 subsea production systems, 3,000 pipelines and approximately 5,000 wells, all of which require to be decommissioned.
Noting the wide range of uncertainties involved it said the associated decommissioning costs could total from £44.5bn to £82.7bn.
It reckons the most likely estimate is £59.7bn.
The figure is broadly in line with the £53bn estimate produced by Wood Mackenzie in January.
Edinburgh-based Wood Mackenzie said then that the UK Government would be expected to pick up 45 per cent, or £24bn, of the bill.
Revenues from North Sea oil have plunged amid the downturn triggered by the sharp fall in oil prices since 2014.
Led by Andy Samuel, the OGA reckons the industry could cut the expected cost of decommissioning by 35 per cent, to £39bn.
This will require firms to develop new ways of working and to collaborate more, helping the UK to develop a world leading decommissioning industry in the process .