MACDONALD Hotels’ managing director has highlighted “some fabulous planning permissions” for properties in the 27-strong portfolio being sold to a private equity player, including an £8 million-plus extension opportunity at the Rusacks in St Andrews.
The impending sale of the 27 properties, revealed by The Herald yesterday, will clear the Scottish company’s near-£190m of bank debt. Macdonald Hotels is not at this stage naming the “major private equity and real estate investor” which is acquiring the hotels.
READ MORE: Scottish hotel group Macdonald in blockbuster sale deal
Gordon Fraser, deputy chairman and managing director of Macdonald Hotels, flagged planning permission for a project to add 44 luxury suites to the Rusacks, which overlooks the 18th green of the Old Course at St Andrews. This proposed redevelopment would increase the number of rooms from 70 to 111, he noted, with three of the existing ones being lost, and also includes a rooftop bar and underground car parking.
Highlighting opportunities for the buyer of the 27 hotels to invest in them, Mr Fraser said of Rusacks: “It will be just such a fantastic property. To develop that out would be north of £8m.”
READ MORE: In full: The 27 Macdonald Hotels being sold
He flagged planning permission for a major extension of The Compleat Angler, at Marlow in Buckinghamshire, which overlooks the River Thames, including the addition of 29 suites as well as the development of spa and function facilities.
Mr Fraser said: “We are sitting on some fabulous planning permissions.”
Highlighting the Rusacks and Compleat Angler proposals, he added: “If we were to do these, we couldn’t spend a penny on anything else.”
Mr Fraser has noted the group’s ability to invest has been constrained in the wake of the global financial crisis, which got under way in earnest in 2008, as it cut its debt. He said: “Since 2008, we have not had a capital expenditure facility from the bank (Bank of Scotland). Any investment we have had in the properties, we have had to pay for that out of our operating cash flow.”
READ MORE: Scots four-star hotel in £1.6m refurbishment led by Glasgow firm
Macdonald Hotels, the vast majority of which is owned by 72-year-old industry veteran Donald Macdonald and his family, had total debt in excess of £700m more than 10 years ago, Mr Fraser has noted.
Mr Macdonald said: “The board unanimously agreed that selling the majority of the hotels to a new, well-funded investor will enable them to realise their full potential, both as hotels and in terms of the significant development potential on several of the sites. This is excellent news for the 2,200 loyal employees based at these hotels.”
He will retain control of 20 hotels and resorts in the UK and Spain, including four in the Monument business his family owns with Macdonald chief operating officer Gerry Smith, after the deal. Mr Macdonald, Mr Fraser and Mr Smith will lead the business being retained, which includes four hotels at Aviemore.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here