• PE looks to exits from UK four-stars

The consolidating four-star sector in the UK provinces is set for yet more deal flow as the current crop of private equity buyers seeks an exit.

Dawnay, Day is weighing up options for its Dawnay Shore Hotels and QHotels, which has completed the £180m buy of Marston Hotels, is likely to see its backer, Alchemy Partners, seek to leave within a couple of years.

Dawnay Shore Hotels said last week that it was conducting a strategic review on its 20-strong portfolio. Specifically mentioned was the opportunity to transfer its holding into a Real Estate Investment Trust.

Rothschilds and Shore Capital have been appointed to conduct the review on the business which is worth somewhere north of £500m. It comprises the original 13-strong Paramount Hotel chain, which it bought from Alchemy in 2004 for £215m, plus a number of other acquisitions including Furlong Hotels which have been added since.

Meanwhile, Alchemy will be keeping a weather eye on Dawnay Shore’s progress towards REIT status in regard to a possible exit for its QHotels.

The addition of Marston’s 1,200 rooms takes the chain to 21 hotels with combined sales of £150m a year. Apart from Marston, QHotels has this year added the Westerwood Hotel in Cumbernauld, sold by Morton Properties, and the Cheltenham & Gloucester Moat House, sold by Westmont.

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