A consortium with Heeton Holdings, KSH Holdings and Ryobi Kiso Holdings has agreed to acquire the Dry Bar entertainment venue in Manchester. As part of Treasure Choice Enterprises' agreement, which has an undisclosed purchase price, the venue will be converted into a new hotel.
The JV deal will see Heeton taking on a 50 percent stake in the property while KSH and Mchester Development—a 40-percent associated company of Ryobi Kiso—will each own a 25-percent stake. According to a filing to the bourse operator, Treasure Choice submitted, the consortium was granted planning permission in 2015 to convert the upper floors of the building into a hotel. "The property is a four-story terraced building with one basement level. It has a total gross internal floor area of approximately 20,713 square feet," the conglomerate said in a statement. Once the redevelopment process is complete, Heeton's hospitality division will manage the hotel. Its hospitality division currently operates five other hotels in the UK.
Factory Records opened the Northern Quarter landmark venue in 1989, quickly becoming a major player in shaping Manchester's 20th century music history for three decades. “Manchester has experienced exceptional growth over recent years in the leisure and hospitality sector and the development will add to the Northern Quarter’s reputation as a major destination within the vibrant international city,” Treasure Choice Enterprises said.
Heeton set plans in late May 2017 to beef up its hospitality business as it diversifies its assets. Possibly launching more Luma-brand hotels in more markets was considered in the strategy. The brand’s current property portfolio has 1,048 guestrooms in Japan, Britain and Thailand with two more in the pipeline: a property in Fortitude Valley, Brisbane and another in Leeds, Britain, operated by Hilton. Eric Teng, Heeton’s CE told The Straits Times that he hopes the hotel sector will contribute to a “significant” portion of its revenue. Hospitality contributed nearly 14.6 percent—about $9.8 billion—of Heeton’s revenue in 2016, up $5.8 million from 2015.
Heeton launched its firm in 2011 through the acquisition of Mercure Hotel Pattaya in Thailand. The firm has expanded its footprint rapidly with the acquisition of Ibis Hotel Gloucester, Holiday Inn Express Hotel Manchester City Center in Britain and a hotel building in Sapporo City, Japan.
Teng predicts that the firm will find steady success through hospitality. “As a listed firm, we are always looking for recurring income, and hospitality is ideal partly because it’s a cash-flow business,” he added. He also forecasts that the industry will help the firm overcome the “lumpy” income issue from the property development business.