Safestay acquires 52-room property in central Vienna

Hostel operator Safestay has successfully secured a long-term 20- year lease at a site in central Vienna.

Safestay told investors on Wednesday that the property, which was currently operating as a 52 room hotel on Schönbrunner Strasse 41, would be converted into a 234-bed branded hostel.

The AIM-listed group noted that as the switch from hotel to hostel was "relatively straightforward", it expects the conversion to be completed in three months and at a cost of less than €300,000.

Safestay said the acquisition represented a "significant step" in its European expansion - positioning the group to benefit from the continued growth seen in the hostel market on the continent, which by 2020 is projected to grow by 7-8% per year.

Chairman Larry Lipman, said: "Vienna has long been on our target list of cities given its global appeal. The site is ideal for our purposes and will become an attractive premium hostel in the heart of this famous city."

"We are confident it will quickly be an earnings enhancing transaction and as importantly be a significant and popular addition to our expanding network."

As of 1100 BST, Safestay shares had slipped 1.27% to 38.01p.