Hotel deal will help tycoon expand care homes business

May 28 2008 by Chris Knox, The Journal

A PROPERTY tycoon has found a new way to double the size of his £30m care home business.

Raj Singh, owner of Stockton’s Prestige Group, is leasing his Prestige Hotel in South Shields to hotel and restaurant group Whitbread, which will see he him receive an extra £270,000 in rent each year to help expand his portfolio of care homes.

He owns three care homes in Middlesbrough, one in Darlington, one in Stockton and one in Chichester, West Sussex and plans to use the deal to fund the building of three extra care facilities in Nottingham, Hull and Birmingham, bringing his total to nine. After this he plans to buy and lease out a second hotel in Darlington to help build three more homes.

Mr Singh, who rents his care homes to a number of companies including Darlington market leader Southern Cross Healthcare, believes the new business model will help him double his rental income to £3m as well as double the value of his £30m portfolio.

He said: “I have many plans to grow the number of our care homes over the coming years and see refurbishing and then leasing out hotels as the way to fund our expansion.” Mr Singh bought The Prestige for £2m in 2003 as a going concern and has since turned it around by refurbishing its 64 bedrooms and 300 capacity function room.

As well as the annual £270,000 income from Whitbread, Mr Singh will also benefit from fixed rental price rises in six and 10 year intervals.

He said: “It was a sad day to walk out of The Prestige for the last time, a big wrench. A lot of people questioned our decision to buy the hotel nearly five years ago, but, after a lot of hard work and investment, it is now a superbly run hotel, with high levels of occupancy, good room rates and attractive turnover.

“I will always be proud of what we have achieved at The Prestige.”

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