Arbitrage RE provided due diligence support to an interested investor, a leading global credit specialist and investment manager, with its European HQ based in London, in relation to a potential acquisition of two hotel properties located in the city of Agios Nikolaos, Crete. The assigned work led to the issuance of two due diligence reports, a Technical (TechDD) and a Commercial (CDD).
The first of the two hotel properties in Agios Nikolaos was built on a c.4,000m2 site, with a total built area of more than 13,000m2 and consisted of more than 210 rooms. The second hotel property is built on a c.2,200m2 site with a total built area of c.7,700m2 and consists of more than 160 rooms. Both hotels have been developed with 4 and 3 levels in the front – north/east side of their plot respectively. Both buildings have their pool deck on the 5th and 4th level respectively.
The objective of the technical due diligence work was to inform the interested investor on the qualitative and quantitative analysis of the following aspects of the examined properties:
- Planning regulation compliance and construction permits conformity.
- Structural elements macroscopic assessment and overview of possible repair works.
- Required rectification CapEx
For the preparation of the commercial due diligence report, the commercial team retrieved, collected and studied competition figures, ADR, revenues and comparable data and also defined reinvestment opportunities and future commercial potential. The commercial report included a market analysis that examining key facts and data related to the broader location, accessibility to the sea and latest renovations in the proximity. The hospitality team also investigated probable cooperations with TOs and hotel brands.
To conduct the due diligence work, our expert teams performed thorough property inspections. In the context of preparing the reports, a large number of supporting technical and commercial documentation was utilised as provided by the owner (the “Seller”) and its advisors, as well as sourced by the Local Planning Authorities from project team members.