European hostel group Safestay has agreed a £3.125m sale and leaseback deal on its freehold property in Brighton to a private investor.
The group acquired the five-storey Grade II listed property in June 2024 for £2.275m and in April 2025 received planning consent to develop a 170-bed hostel.
Under the 15-year leaseback agreement, Safestay will benefit from a six-month rent-free period and after that period ends, it will pay approximately £300,000 per year in rent.
The net proceeds from the transaction will be used to repay the group’s debt, provide working capital and strengthen its balance sheet. The deal is conditional on certain approvals being obtained from the company’s bank with completion of the sale expected before 15 January 2026.
Larry Lipman, chairman of Safestay, said: “The sale and leaseback of our Brighton freehold property for £3.125m is fully aligned with our strategy to crystallise value for shareholders while supporting sustainable long-term growth. Alongside the recent successful sale and franchising of our Edinburgh freehold, this transaction will further strengthen our balance sheet and provide additional flexibility as we continue to deliver our plans to create shareholder value.
“Work is well underway to convert the property into a fantastic, 170-bed hostel ahead of opening next summer. Once operational, the site will create approximately 20 new jobs in the area as well as making a significant contribution to the local economy by enabling potentially thousands more visitors a week to stay in one of Brighton’s most vibrant and commercial areas.”
