Secret deal seals £2.5m Pitlochry hotel sale
Colliers International has facilitated the sale of a popular Perthshire hotel in Pitlochry, in an off-market deal to Irish-owned Castle Collection, with a guide price of £2.5 million for the freehold property and business.
Scotland’s Hotel and Leisure Club in the Perthshire town was sold by Julian Troup, head of Colliers’ UK Hotels Agency, on behalf of the Crerar Hotel Group.
Troup said: “The acquisition of Scotland’s was conducted in a highly confidential fashion and is an example of domestic and overseas buyers looking to secure a hotel in a prime Scottish location.”
The hotel is situated off the main street of Pitlochry and has 72 bedrooms, an impressive lounge, a restaurant and swimming pool, as well as planning consent for 24 additional bedrooms.
It has been acquired by the Castle Collection, which is owned and run by the Maccumhaill family. Scotland’s Hotel and Leisure Club joins Fishers Hotel and Atholl Palace, also in Pitlochry, in the group’s property portfolio and is its seventh hotel across Scotland, Ireland and Wales.
Fionn Maccumhaill, managing director of Castle Collection, said: “We are delighted to add Scotland’s Hotel and Leisure Club to our collection, which will strengthen the hotel base and tourist offering, in what we believe is the heart of Scotland.
“Pitlochry is a great choice for ‘staycation’ tourism and we aim to create a modern metro boutique hotel with spa to grow this segment of the market.
“We will be investing a further £2m over the coming year to develop [the hotel].”
Off-market or confidential deals have advantages for hotels being sold as a going concern according to Colliers’ Troup.
He said: “Open marketing of a hotel can affect trade, particularly if it is a wedding-based business, and can affect staff morale, so sometimes there is an advantage in a confidential marketing strategy.
“While advertising a hotel on the open market can sometimes attract buyers who haven’t previously been in the industry, hotels of this size are usually bought by those with experience in running an establishment already, or investors who will bring in their own management team.”
Troup says that the deal is typical of the buoyancy of the Scottish market. “We have found that the whole of Scotland has increased in popularity in the last three or four years; one of the drivers has come from overseas buyers who are keen to invest in Scotland.”
Paddy Crerar, chief executive of Crerar Hotel Group, commented: “It was a pleasure to deal with the Maccumhaill family and Castle Collection, which made the difficult decision to let Scotland’s go much easier.
“Scotland’s could well have been retained to be redeveloped and join the portfolio we are fully committed to building, however, the deal made sense to both parties.
“Our strategy is on track to rightsize our Scottish portfolio and we are well on with significant investment and development of the majority of our retained hotels.
“Colliers [has] been instructed to market a further three of our hotels – each of which are solid highly profitable performers in great locations – as a group of three. They are a very attractive opportunity.”