Hotel property owner Pandox has expanded its portfolio with the acquisition of three aparthotels in central London, UK, for £230m ($303.9m), marking a significant investment in the extended-stay segment.

Axiom Hospitality operates the properties under the Residence Inn by Marriott brand via a management agreement.

The hotels have a combined room count of 503, offering modern accommodations with an average room size of 28m². Each unit features a kitchen or kitchenette, catering to guests seeking extended-stay options.  

Pandox CEO Liia Nõu said: "The hotels are highly profitable, and the hotel products are well established in the market with strong distribution via Marriott International, which becomes a new cooperation partner to us.

"The hotel properties are of high technical and environmental standard and contribute positively to the overall quality of our hotel property portfolio. Through the acquisition, we also increase our already strong hotel operating partnership with Axiom Hospitality to a total of eight hotels in the UK.”

The acquisition includes both the hotel properties and operations.

The sellers are affiliates of Starwood Capital, and the properties are freehold.

Pandox anticipates the new additions to contribute around £34m in annualised revenues and £17m in net operating income, reflecting a yield of more than 7%.

Financing for the deal came from Pandox's available cash funds and a new secured and green bank loan, supported by the properties' high energy ratings.

The aparthotels will be incorporated into Pandox's Own Operations business segment.