Business
Sale and Leaseback of Brighton Freehold Property
Safestay plc has entered into conditional contracts to sell its Brighton freehold property for £3.125 million, with completion expected by January 15, 2026. The net proceeds will be used to reduce debt, bolster working capital, and strengthen the balance sheet, supporting future growth. This follows the recent sale of Safestay Edinburgh for £5.35 million. The Brighton property, acquired in June 2024 for £2.275 million and valued at approximately £2.4 million as of June 30, 2025, will be subject to a 15-year leaseback agreement, including a six-month rent-free period, while Safestay invests £1.0 million in its conversion into a 170-bed hostel set to open in summer 2026. Annual rent post-free period will be around £300,000. Disclaimer*
About this update from Safestay Plc
[{"type":"text","content":"\n\nSafestay plc\n(\"Safestay\", the \"Company\" or the \"Group\")\n \nSale and Leaseback of Brighton Freehold Property\n \nSafestay (AIM: SSTY), one of Europe's largest hostel groups, announces that it has exchanged conditional contracts for the sale and leaseback of its freehold property in Brighton (the \"Property\") to a private investor for a cash consideration of £3.125 million (the \"Transaction\"). The contracts are conditional on certain approvals being obtained from the Company's bank, with completion of the sale expected before 15 January 2026.\nThe net proceeds from the Transaction will be used to repay indebtedness, provide working capital and strengthen the Group's balance sheet, supporting the delivery of its long-term growth ambitions.\n \nThe Transaction follows Safestay's announcement on 17 June 2025 that it was considering the conditional sale of certain UK freehold assets and the recent announcement of the sale and subsequent franchising of its freehold property and hostel, Safestay Edinburgh Cowgate, for a cash consideration of £5.35 million, which is due to complete on 1 December 2025.\n \nThe Group acquired the Property in June 2024 for £2.275 million and, in April 2025, received planning approval to develop a 170-bed hostel. As at 30 June 2025, the unaudited book value of the Property was approximately £2.4 million.\n \nUnder the 15-year leaseback agreement, Safestay will benefit from a six-month rent-free period as it continues its previously announced £1.0 million investment in converting the Property so that the hostel may open as planned in summer 2026. After the rent-free period, Safestay will pay approximately £300,000 per year in rent.\n \nSet over five storeys, the Property is an attractive Grade II listed, Regency-style end of terrace 15,300 sq. ft. building on Pavilion Parade. It is ideally situated in the centre of Brighton, 600 metres from the seafront and opposite the Royal Pavilion, a former regency palace and one of Brighton's most popular tourist destinations.\n \nLarry Lipman, Chairman of Safestay, said:\n\"The sale and leaseback of our Brighton freehold property for £3.125 million is fully aligned with our strategy to crystallise value for shareholders while supporting sustainable long-term growth. Alongside the recent successful sale and franchis...