Nordic hotel operator Scandic has signed a long-term lease with Finnish private equity fund CapMan Hotels to take over a 178-room hotel in Helsinki, Finland. The companies also agreed to extend leases for an additional four hotels across Finland with 979 guestrooms.
The 178-room Scandic Pasila is in Helsinki’s digital media hub Pasila. Scandic will take over management of the hotel from its current operator in 2020.
"We are extremely pleased to extend our already strong offering in the Helsinki area through Scandic Pasila, a hotel that will complement and diversify our existing portfolio," said Aki Käyhkö, MD of Scandic Hotels Finland, in a statement.
The hotel will be near the largest exhibition center and sports and events arena in Finland, Messukeskus, the large congress and trade fair area. The property will also be near the upcoming Tripla city center—a three-block complex that will have a shopping center, residential units, offices and a public transport terminal.
The lease extensions include four Scandic-operated hotels with existing leases that will expire in three years: the Scandic Aulanko in Hämeenlinna, the Scandic Eden in Nokia, the Scandic Waskia in Vaasa and the Crowne Plaza in Helsinki. Scandic operates the Crowne Plaza under a franchise agreement with InterContinental Hotels Group. The prolonged agreements are revenue based with minimum guarantees. Scandic and CapMan Hotels will also begin an extensive renovation program for the hotels. Both companies will invest about €20 million each to secure hotel offerings for the future.
"This is a good agreement where we can ensure the long-term operation of these five hotels. Scandic has an excellent track record of running hotels in Finland, and it’s the largest hotel chain with the best coverage in the country and the Nordics. We look forward to a profitable partnership with Scandic going forward," Pirjo Ojanperä, partner at CapMan Hotels, said in a statement.
Scandic has a portfolio of 53 hotels across Finland. Helsinki has a majority of these with 12 hotels currently operating in the capital city. The most recent additions to portfolio came from Scandic's acquisition of Restel on June 21, 2017. Scandic took over operations of 35 Cumulus-branded hotels and rebranded them as Scandic properties. The group also took over operations of Holiday Inn, Crowne Plaza and Hotel Indigo properties originally owned by Restel. Scandic will not rebrand these hotels.