Good morning, ladies and gentlemen, and thank you for standing by. Welcome to today's Pandox Q4 2018 report. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question and answer session. At which time, if you wish to ask a question, you will need to press star and one on your telephone and wait for your name to be announced. I must advise you this conference is being recorded today on Thursday, February 14, 2019. I will now hand the conference over to our speaker today, Anders.
Yeah, good morning, and welcome to this presentation for Pandox year-end report for 2018, and also maybe welcome to Valentine's Day. My name is Anders Nissen, I'm CEO of Pandox, and with me I have Liia Nõu, our CFO, and Anders Berg, our Head of Communication and Head of Investor Relation. This presentation will be, as always, divided into two parts. We start with the presentation, and followed by our Q&A session. So welcome to Pandox year-end report. The headline is profitable growth for both the quarter and the year. You can see that the total net operating income increased by 25% for the quarter, that is good, and 29% for the full year, which is even stronger. Return on equity on an annual basis was 17% for 2018. If I might say, the positive development, the driver, we can explain by mainly three main factors.
First is, of course, profitable acquisition that we have done in new large market, mainly U.K. and Ireland. We also have seen a strong development in Brussels, another good year in Brussels. A strong market where we take market shares, and with this additional revenue, we convert most of it to cash, which drives, of course, our like-for-like. We'd also say, in general, a stable demand in the hotel market. So this is the three drivers behind the strong Q4 and strong year-end. If we move over for like-for-like, the property management increased by 1% for the quarter and 1% for the full year. This is under our internal expectations, and we have now increased focus on value-adding investments. Hopefully, we will see some sort of improvements already 2019.
Like-for-like operator activities increase was on the other side, very strong, increased by 11% for the quarter and 10% for the full year. I will also make sure that you notice that our Radisson Blu Hotel, Glasgow was included on October 31, and The Midland Hotel was included on November 1. We'd also complete the divestment of Scandic Ferrum on December 3. Let me also say, when we now talk about year-end, that I'm a bit proud of what Pandox have achieved and the Pandox organization for the past year. We have managed to balance both challenging external and internal focus very well. External processes by having a huge investment program, buying hotels for SEK 19 billion. At the same time building up routines and processes for reporting and control for a much larger company in a much more international world.
I will say that is well done. Thank you for listening to that. Let's move over to page three, please. In the fourth quarter, Pandox total net operating income increased by SEK 158 million. That is increase of 25%. For the full year, total net operating income increased by SEK 681 million. That's increased by 29%. Key factors again, strong performance in U.K. and Ireland, strong growth in Brussels and Berlin, and stable underlying demand in general for the hotel market. The negative factor who pressed the RevPAR is weaker trade fair calendar in Germany. As many of you know that the trade fair calendar is uneven between years. 2018 was weaker, and 2019 will be a bit stronger. In fact, 2018 has a weaker trade fair calendar. We also see some negative effect on renovations, which we guide already in Q3.
To do this value-adding investment, we need to take out capacity, which means that we decrease our revenue for then hopefully having a stronger hotel on the other side, and that will have a positive effect on the growth for the company, maybe 2020, 2021. Some negative renovation effects. Then of course, increased capacity of new hotels in some markets. Next page, please. We are on page number four. Since Pandox returned to the stock market in June 2015, or come back the second time on the stock market, we have had working with a high business tempo. We have done acquisition, as I mentioned before, for approximately around SEK 19 billion. We have investing SEK 2 billion in value-adding, driving project in our existing hotels, and we have secured more than 60 new lease agreement, most of them outside the region. The positive effect is there.
We have double the net operating income, and we have double the total cash earning measure on a rolling 12-month basis. So a happy year. If you go to page number five, please, then we have the portfolio overview. Pandox has today a well-diversified portfolio dominated by lease agreement, and a good balance and good demand between countries, cities, locations, and guest segment. At the end of the year, we own 144 hotels with 32,000 rooms for a total market value of SEK 55.2 billion. 128 hotel properties is owned and leased, representing 85% of the total portfolio value, and 16 hotels is owned and operate, representing around 15% of the total property value. Next page, please. We are now at page number eight. All of Pandox follow our active strategy to acquire more hotels and grow the company. The international share had increased in recent year.
We now are present in more than 80 cities in 15 countries, in a well-balanced and attractive mix of international and the domestic destinations, which is a key driver for balance out the risk. In terms of portfolio market value by geographic area, the Scandinavian stands for 46%, Mainland Europe for 31%, U.K. and Ireland for 21%, and Canada for 2%. Next page, please. Let me point out a few highlights for Q4. We have finished our extension of Leonardo Hotel Wolfsburg City Center and adding 150 new rooms and a new meeting area. The hotel has now 345 rooms and had entered into the full-service segment. So transposition from an ordinary mid-market hotel to the largest full-service center in Wolfsburg. That is, we have high expectation on this for 2019 and 2020. If we move to the next page, the same story for a Europa Hotel Belfast.
We are adding 83 new rooms and have now a total of 270 rooms. The same story, and well-located, but ordinary mid-market hotel has become one of the largest hotel in the city, and this itself is, of course, a strong platform for grow the business. If we look at the third example, it is a DoubleTree by Hilton Montreal, that we have rebranded from the Hyatt to DoubleTree, and the main driver is that Hilton has a stronger platform in Canada than Hyatt has. We very strongly believe that we can add in more revenue because of we coming into a system in a network, a stronger network and system. Hilton do not have any premium hotel in Montreal, so I think we will be their best choice for their customer. This hotel is ongoing some smaller renovation at the moment, but the rebranding is already done.
A lot of expectations, even in Montreal. We have now two hotels in Montreal, and both of them are leading in their specific segment. The InterContinental, which is one of the premium hotels and one of the leading premium hotels in the city, 350 rooms. We have DoubleTree by Hilton, which is the largest and leading hotel if you talk about leisure, meeting, and festival segment. If we now go to page number six. What it is? 16? 12 please. We talk about the board selection of operators and brand. This shows the strength of Pandox today by having now a much more Pan-European position that we have access to all brands and their network, which is, of course, value-adding. The brand that we are working lately and done a lot with is Jurys Inn and Leonardo, but also Hilton and Radisson Blu. We have been active team.
Even NH, the Spanish company, we have done a lot with last year. Then of course, Scandic, that we already are active together with. If we now go over to market picture, page number 12, please. You can see that Europe's RevPAR is still going up, and you see 7% for the Q4. That is whole Europe. We need to remember that Northern Europe has about 2.5%, which is in line with what Pandox also had. Northern Europe is the weakest part of Europe, but still a stable growth. If we move to the graph on the right, you see that Austria, Finland, Ireland, and U.K. had a strong end of 2018. If we move to page 13, some key markets who was also strong in Q4, Brussels, which I already had mentioned.
Berlin, which has a strong end of a big meeting and also have a promising 2019. Helsinki, Copenhagen, Stockholm was also a market who came back and came to positive number because of a strong Q4. If we look specifically on Stockholm, you can see that this overcapacity of new hotel coming into the market in 2015, 2016, and 2017 is now absorbed in the market. We see three quarter in row who has a positive RevPAR growth. The worst for Stockholm is over, and that shows very well how strong the hotel market is. It take one or two years, then we have absorbed the new capacity, and we are back to good RevPAR numbers again. With that said, I hand over for our CFO, Liia, for the financial highlight.
Thank you, Anders. We are now at the financial highlights, and I think it is page 13. Both for the fourth quarter and for the year, Pandox recorded profitable earnings growth in both business segments. Some key numbers for the quarter as well as for the full year. Starting with property management. In the fourth quarter, rental income amounted to SEK 749 million, an increase of 31%. For the year, rental income amounted to close to SEK 3 billion, an increase of 35%. Like-for-like, property management reported an increase in rental income of 1% for the fourth quarter and 2% for the year. In the fourth quarter, net operating income amounted to SEK 627 million, an increase of 28%. For the year, net operating income amounted to SEK 2.6 billion, an increase of 34%.
Like-for-like, property management reported an increase in net operating income of 1% both for the quarter and for the year. Continuing with operating activities. In the fourth quarter, net operating income amounted to SEK 165 million, an increase of 15%. For the year, net operating income amounted to SEK 540 million, an increase of 9%. Like-for-like, operating activities reported an increase in net operating profit of 11% for the fourth quarter and 10% for the year. For the year, total cash earnings amounted to SEK 1.9 billion, an increase of 14%. Total cash earnings per share increased by 8% for the year. Cash earnings for the fourth quarter was affected by a combination of increased current tax and an elevated comparison in 2017, a year ago, due to positive one-offs. Measured from year-end 2017, the unrealized value increase for investment properties amounted to 3.4%.
For operating properties, the unrealized value change amounted to 3.0%. End of period, EPRA NAV per share was approximately SEK 164. Adjusted for dividend, and in such cases proceeds from new share issues, the annualized increase in EPRA NAV was approximately 17%. Next page, please. Financial expense amounted to a negative SEK 240 million and is explained by different factors. An increase in interest-bearing liabilities after implementing acquisitions where debt denominated in foreign currencies have increased, especially the British pounds, where LIBOR is markedly higher than STIBOR or EURIBOR. Also, Pandox has interest hedged a larger share of its loan portfolio. Finally, weaker Swedish krona versus the other currencies that Pandox has loans in. Next page, please. In the fourth quarter, property management continued to benefit from profitable acquisitions and a favorable hotel market. However, Pandox growth was constrained by negative renovation effects in Stockholm, Cologne, Tampere, and Vienna.
The development remained positive in the U.K. and Ireland, supported by both favorable market growth and market share gains after previous renovations. Rental growth in the comparable portfolio was positive in Denmark, Finland, Sweden, and Austria. Stronger destinations in the fourth quarter were, among others, Wolfsburg, Munich, Copenhagen, and Helsinki. In Stockholm, rental growth decreased by 4%, mainly due to negative renovation effects. Next page, please. Operating activities. In the fourth quarter, both revenue and net operating income increased, supported by strong performance in Brussels and Berlin.
Hôtel Trocadéro also contributed positively after renovations. Profitability in the business segment saw some impact from costs related to the rebranding of DoubleTree by Hilton Montreal. Next page, please. Page 17. For the year, total unrealized and realized changes in value amounted to approximately SEK 1.7 billion, of which the SEK 1.4 billion for the investment properties and SEK 224 million for operating properties.
The value increase is explained by a combination of improved cash flow and lower yields. During the year, two hotels were reclassified from operating properties to investment properties, thereby explaining the SEK 773 million of assets being reclassified. End of period, the average valuation yield for investment properties was 5.51%, for operating properties 6.74%. Next page, please. Finally, a brief look at our EPRA NAV and financial position. End of period, EPRA NAV per share amounted to a rounded SEK 164. This corresponds to an increase of approximately 17% on an annualized basis, adjusted for dividends and proceeds from directed share issue. The increase is in part explained by changes in currency exchange rates following a weak Swedish krona. Loan-to-value amounted to 49.7%. Liquid funds and long-term unutilized credit facilities amounted to SEK 2.5 billion. Pandox financial position remains strong and stable. Next page, please.
Pandox Board of Directors is proposing a dividend of SEK 4.7 per share for 2018. This represents a payout of SEK 787 million, corresponding to 42% of cash earnings. This is at the lower end of Pandox financial target range and should be viewed in the light of continued attractive acquisitions and investment opportunities. Measured from 2015, the dividend per share has increased by approximately 7% per year. Next page, please. With that, I hand over to Anders for some final words.
Yeah, thank you, Liia. Well, let's try to talk a little bit about 2019. The general comment is that conditions for a good hotel year 2019 are favorable. Let me try to explain. Even if the growth is slowing a bit, the absolute level of economic activity in most of the Pandox market is good and strong, and that's the platform. We can also notice that number of events, trade fairs, and large meeting are at least at the same level as 2018. That is promising. We also have noticed that UNWTO forecast an increase of international arrivals to Europe of 3%-4% in 2019. You can see that number of Chinese visitor is much larger into 2019 compared to 2018 at the same time. That is also something who will grow our industry.
At the same time, when we are in this absolute level, the profitability in the underlying hotel market is solid and strong, meaning that it's easier to do value-adding investment together with our partners. That is also something we think we can increase over the next two years. With this positive argue, there is, of course, also some negative impact, and that is that we have strong comparison, which, how you see it, also reflect the strong and profitable hotel market. We see increased capacity in some markets, which take some time to digest. If you look at Stockholm, Frankfurt, and Hamburg, they were for a year and a half ago in an overcapacity situation. Now that all three market absorb these new hotels and coming back and have a growth perspective for next year.
Now we see Oslo, Copenhagen, and London Heathrow coming in in the same phase, and that will take some time for these three markets to come back. Negative renovation effect, but that is also something who push some of Pandox growth into the future. So, in sum up of what I have tried to say is that based on a positive economic growth, our position as one of the few hotel property company with a pan-European position, our well-diversified portfolio and contribution from acquisition made in 2018, we see potential for some growth in 2019. At the end, please remember, the timing of Easter is, this year, expecting to have a positive impact on the first quarter. Thank you very much for listen. Operator, we are now ready for questions.
Thank you. As a reminder, if you wish to ask a question, please press star and one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press the hash key. Once again, please press star and one if you wish to ask a question. Our first question comes from the line of Fredrik Cyon from Carnegie. Your line is open. Please go ahead.
Good morning, Anders and Liia. A couple of questions from my side. Starting off with the like-for-like 1% in the fourth quarter, you were mentioning the renovation effect adversely impacting that number. What would the growth have been without the significant increase in renovations?
If I include [inaudible] in taking out renovation-
Yeah
the number would have been much larger. I cannot give you exact number, but hard to say exactly the number, but let's say 3%-4%.
Good. You are mentioning that you have approximately 1,000 rooms that are being refurbished. That is approximately 3%. So I guess that is why you get approximately 3%, 4% that you mentioned.
Well, we have the same number for Q1 as well in number, but you have different sort of hotels that you renovate. You can see that at Q4, Amsterdam, Vienna, to give you two example, was very strong. At the same time, we were into large renovation of our hotels there. So of course, if you see for Q1, the same with Stockholm, who was also very strong. We did renovations in all our three city hotels for Q4. That was something we guided, as you most likely remember, also for Q3, that will have some effect. So it is a combination of what sort of renovations you are doing and how the market is at the same time developed as the hotel is into, of course. So it is hard to give you an exactly answer.
I see. You are mentioning that you have about SEK 1.3 billion in future investments, which is almost 50% higher than a year ago.
Yeah.
Should we expect the investment volumes to peak in 2019? Or do you foresee that this kind of pace will continue for the foreseeable future?
Well, I would say, as I said, we have increased our focus on doing value-adding investment. As you remember, the priority number one was to grow the company. Now we have come to a size that give us a lot of opportunity to do value-adding investment. We now increase our focus there. I would say that the number you have see, EUR 1.2 billion of this of investment is something we will continue also in 2020, I would say. That is where I believe how we should do our organic growth in end of 2019, in 2020, and maybe 2021. If market is slower down, then you need to take market shares, and the only way of doing it is to doing value-adding project if the market is, as I said, slowing down.
That is clear. Two more questions from my side. On the payout ratio of 42%, obviously that is in lower end of your range. You are stating that is due to potential acquisitions, but also investments. Which of the two is the leading one or the most important one for choosing the payout ratio of 42%?
I do not really think I got the question.
I think they are both equally important. Either we acquire and for the investments, we look at the highest yield possible. As acquisition opportunities are, as yields are coming down somewhat, as Anders said, the return on existing investments are very good, but also we do actively look at acquisitions all over the place as well. 50/50, I would say, if anything.
Yeah.
I understand. Then the final question, Anders, you mentioned a couple of markets where there is a lot of capacity coming in 2019.
Yeah.
On the positive side, which markets do you expect the strongest RevPAR growth going into 2019?
Germany definitely is something we have expectation on, and that is because of the trade fair calendar is stronger in 2019 compared to 2018. So that is a good market. We still see a growth potential in Brussels, that will continue to go up. Then, of course, Swedish regional city looking also promising for 2019. So that is a good growth. I would say U.K. is not bad.
Thank you.
Thank you.
Thank you. Our next question comes from the line of Simen Mortensen from DNB Markets. Your line is open. Please go ahead.
Yeah. Thank you. One question. In terms of the renovations which you mentioned had a big impact in Q4 2018, how and when will these be completed and combined also, how much do you expect the Easter effect normally be between a Q1 and a Q2 [inaudible], depending on when Easter actually comes.
If we talk about Easter first, 3%-4% that balances out in Q2. If we go to renovations, the renovations for the Stockholm three hotels in Stockholm. Two of [inaudible] is done, more or less, that is positive. I will say that, hotels that we are into at the moment and do renovations, I said we had increased [inaudible] on value added [inaudible] it is more or less the same as [inaudible]. You will see some sort of [inaudible] in those markets. On the other hand, you will see [inaudible] coming in in comparible number, and they expecting to have positive effect [inaudible].
Another question goes to Liia and your maturites on debt in 2019 and perhaps in [inaudible], CEO has done a lot of refinancing this quarter. What can you say about the trends you experienced in refinancing debt given what we have seen in the [inaudible] market and how that has widened.
Well for now we don't have the bond, we are purely mortage with our relationship bank. We have ongoing refinancing basically rolling and all the dialogue and experience so far is that it's pretty much stable 2018 and what we look at. Pretty much in line with what we have been before.
Thank you.
Thank you. Our next question comes from the line of Christopher Fremantle from Morgan Stanley. Please go ahead.
Good morning. My first question was on the [inaudible] in acquisition. Is your [inaudible] acquisition hitting the business plan that was set when you acquired one year ago, and if you could just give us a feel for the underlying growth rate in that portfolio. That would be helpful or in the UK business as a whole, that would be great please. Secondly, well [inaudible] first then I will ask my second question.
Okay, when we announced that we acquired [inaudible] we said that we will be expecting to have a growth in 2018 for 2%-3% caused a positive effect on renovations as you might remember. The perfomance has been better than that. [inaudible] has done better than we expected and mostly it's because of a stronger focus on revenue management. The positive effect on the renevations which was well done from the [inaudible] together with management of the team stronger revenue. We see now the potential of extending rooms in the few hotels like in Oxford and Inverness. We spoke about this before we have just done [inaudible]. We see a few hotels that we can do value adding investment and continue to grow better in the market.
I will say the general market for [inaudible] expecting to be up and 1% for 2019, I think we will do better.
Can you help us on the [inaudible]. Particularly in the operating business. Both on a revenue and wide basis. Can you just help us with the normal like effect that we should be modelling towards for 2019. That is something that is difficult for us externally to get a feel for.
As you see there [inaudible] but we still see a growth potential. Maybe half of it?
Sorry that's for the like-for-like elemental that's for the sort of the overall-
The like-for-like?
Right but what about the normal like element to do that business, clearly you've got, I assume there are some [inaudible]
Sorry, we can't hear with this bubbling when you speak.
It's breaking up a little bit.
Apologies. I'm interested in the non like-for-like impacts. Do you have refurbishments or renovations coming through into the numbers in 2019, particularly in the operating business, but more broadly, it's very difficult for us to model that without some guidance from you about what the non like-for-like impacts are going to be. If you could help us there, that would be great, please.
The hotel that we are. If we talk about operator activity, the hotel that we have starting up, a large renovation is current Hilton Brussels City, which will starting up in Q2, and that will have a quite big effect on the number for this year. That will, of course, press the like-for-like in Brussels. On the other hand, the Brussels market expects to go up, as I said, this year it was up 8%-10%. The next year, maybe the market will go up 4%-5%. So it's still very strong market. Or maybe 3%-4% this year, not 4%-5%. I would say the guidelines for the operator activity, even if we do the Hilton Brussels City, that will be a positive development on like-for-like.
Then if you remember that we have bought the Glasgow Hotel as well as Hotel Hubert, which has been for renovation and is now coming back into full gear. So these are the positives coming in as well.
Yeah, maybe you can say that Hubert, the positive effect of Hubert and the negative effect of renovation of Hilton Brussels City will be the same, taking out each other.
Okay.
Is that helpful for you?
Yeah, that's okay. Maybe we take some more detail offline. I just had one other question from the point of view of modeling. Apologies if you've given this somewhere in the release, I didn't see it. On the annual CapEx budget for 2019, are we likely to be broadly similar to what we've done in 2018? Or any help that you can give there, please?
Yeah. It's the same there. Yeah, it's similar. You see, yeah.
Can you just confirm that number, please? The absolute CapEx number.
The CapEx num-
You mean for the FF&E or for the full investment? As I said, we have SEK 1.2 billion in investment coming in, and included in that is maybe between SEK 50 million and SEK 75 million of CapEx/technical investment, which doesn't give so much ROA. However, this SEK 1.2 billion won't come in one year. We are working hard, but it's still over maybe one and a half year or so. So maybe the level of investment, total investment for 2018 was SEK 700 million plus, so not SEK 20 million. I think it's probably in the range of that up to maybe SEK 800 million total investment for next year, depending on how quickly we work.
That is great. Thank you.
Thank you. Our next question comes from the line of Albin Sandberg from Kepler. Your line is open. Please go ahead.
Yes. Thank you, Anders. Better performance than Franza yesterday, maybe. I have two questions. One is on the renovation side for me as well. Just since you are highlighting this, I mean, your portfolio has grown across geographies and so on. I just wonder if you feel that you are into a cycle now where renovation is unusually high for the portfolio, or shouldn't we expect this to be a normal part of your operations?
We had increased focus on value-adding investment because of two reasons. First is that if the market will slow down, and someday they will, we have to create our organic growth through taking market shares and be open for new segment. The strategy to do that is to do new investment and always develop and strengthen our hotels. So that is something we will have more focus on in 2019 and 2020 than we have had in 2017 and 2018. The second one, they are very profitable. The challenge is that we start with taking out capacity and then decrease revenue. So it takes some time before we see the revenue coming back, but they are very profitable. Otherwise, we haven't done them.
Okay, thank you. My second and final question is on the outlook you are giving for 2019 and the hotel market. If you can say anything more. Normally, I assume that you see occupancy coming up and then pricing is improving and so forth. I just wondered, what is it that you see in your portfolio now that confirms this maturing of the cycle? Also, if you look at the overall supply on your current markets, does that follow the normal cyclicality, or do you find that supply is more or less versus previous cycles?
First of all, if you look at the market, I will say that as the Hilton Guide yesterday, and we agree about that, something between 1%-3% in Northern Europe for next year. That seems to be numbers that we can agree about. I am not saying that we will do in that interval. I would say the market will develop in that way. Normally, we have a vision to grow more, but I will say that this is number that we think we can agree about. When we come to value-adding, and then you say new capacity. Yeah, new capacity is always coming at the end of the cycle. What we see now is quite normal for our industry. What is important to remember is that so far, example by Stockholm, Hamburg and Frankfurt, the market can absorb this number quite quick.
As you see in Stockholm, a year ago, we have an overcapacity situation. Now we have growth. That shows the very strong hotel market is. The new market with capacity coming in Oslo, Copenhagen, and Heathrow are three market that we all have hotels and will have some sort of negative impact for us. In Copenhagen, most of it will come at the end of the year, so the impact will be the second half for this year. In Oslo, it is coming already now and in March it is coming two more hotels, and that will have a little bit more stronger effect on the first half of it, and Heathrow is some sort of average.
On the other hand, as I said, Frankfurt, Hamburg and Stockholm coming back, so maybe it balance out these three markets who is coming back with the three markets who is going into overcapacity situation.
Mm-hmm. Should one read into the lower dividend payout ratio that you are cautious given the cycle, or there is no such signals being read into this?
No. The only thing or more than to say that we see opportunity to do profitable acquisition continuously. We wish that we will have a ton of EUR in our balance sheet because that is a lot of things to do. That is the reason why we believe that we do a good job for best job for our shareholder by not pay out high dividend instead of keeping the money and make profitable acquisition. With that said, I have to emphasize that we have increased our dividend by 7% year on year now for the next three years since we come back. So, look at it from a positive view.
Yeah. You will basically keep that growth rate then?
Yeah.
Yeah. Okay. Thank you very much, Anders.
Thank you, Albin.
Thank you. Our next question comes from the line of Simen Mortensen from DNB Markets. Please go ahead.
Yeah. I would like to follow up a bit on the like-for-like and carryforward and those adjustments into 2019. Just wondering how big are the tailwind effects of your recent acquisitions, which you received during the year in expected nominal terms between 2018 and 2019 in terms of how much will property revenues and hotel operations revenue grow based on your done transactions and done refurbishments, which is opening?
Well, when it comes to the acquisitions we have done in 2018, which will have a full year impact on 2019, then it is about SEK 100 million in NOI, and it comes from The Midland Hotel in Manchester, in property investments and also the acquisition we did in Glasgow. Then, of course, remember that we sold Scandic Ferrum in Kiruna at the end of the year. So these are the ones which sort of will affect 2019. The full Jurys Inn portfolio was acquired at the end of 2017. So of course, that is comparable 2018 and 2019 and will be the next like-for-like.
How much would that impact?
With the renovations?
Yeah, renovations.
Yeah. We have done, to give you two example, in Belfast and, as I said here in the presentation, in Wolfsburg, we have adding more rooms into hotels. That will, of course, have a good comparable number for 2019 compared to 2018. We had capacity out of this hotel, and now we're coming back with the full capacity, even more rooms to selling in the market. So that, of course, two example that we will having a strong like-for-like comparison.
Would you like to quantify that?
Would like to?
Quantify that.
Quantify that? No. We can't do that. That is too much in details.
Thank you.
Thank you.
Thank you. Our next question comes from the line of Stefan Andersson from SEB. Please go ahead. Your line is open.
Thank you. Just two questions from me. First, if you didn't touch that and I missed that central administration line. Not lots of comments in the report about it. It's a little bit on a higher level, I guess. Is there some one-offs in there or is this the new established level we should use going forward?
Yes. Thank you. If you look at the different quarters, there are always some differences. We are typically more active in the fourth quarter. We have the hotel market day. This is a year which we've done a lot of projects around digitalization, GDPR, et cetera. But yes, we are building a successful process as an organization for a bigger, more complex Pan-European company. The full year number, there may be differences between the quarters, but this is basically what we are looking for going forward as well.
Okay, thank you. To follow up on that, or the second question connected to that. I get the impression that you are interested in doing further acquisition in Europe, and could you maybe give us a little bit more flavor on which market you currently find more interesting than others?
Stefan, the market we always like is the profitable market, and that can be a little bit everywhere. But if I will give you some sort of more name on it, I believe still U.K. is very interesting. Many investor is not there because they're worried about Brexit, and it's a great to sell market, and the yields are much more favorable than you compare to, for example, Scandinavia.
Okay, thank you.
Thank you. There are no further questions at this time. Please continue.
Okay. Thank you for your interest, and please notice that our annual general meeting will be held the 10th of April at Hilton Stockholm Slussen, and the notice will be sent out to due courses, of course. If you need any more information, please visit our webpage. Thank you very much and have a nice Valentine Day.
Thank you. That does conclude our conference for today. Thank you all for participating. You may disconnect.