Safestay buys hostels in Warsaw, Prague, Bratislava

Hostel owner and operator Safestay said on Wednesday that it has bought three hostels in Warsaw, Prague and Bratislava from Dreamgroup Management for €3.7m.

All three properties are leasehold and the acquisitions are expected to be accretive in the first full year of ownership.

The company bought a 158-bed hostel in Warsaw which is located in the heart of the Old Town and a short stroll from the Old Town Market.

The Prague hostel has 204 beds and is located in the heart of the city. "Given the group's detailed knowledge of the Prague market, the company is confident that this site will become a strong addition to the Safestay network," it said.

The 124-bed Bratislava hostel is "an excellent fit" within the company’s portfolio, Safestay said.

Warsaw and Bratislava generated €1.2m revenues and €0.1m earnings before interest, taxes, depreciation and amortisation in 2018, and it is estimated that following the opening of Prague in 2019, the three hostels will generate revenues in excess of €2m and EBITDA of €0.3m in the 12 months to 31 December 2019.

At 1100 GMT, the shares were down 4.4% at 32.03p.