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Leases are the core of our business

Leases create joint incentives for Pandox and tenants to develop profitable hotel products thatincrease cash flow and thereby also the property value.


Function and advantages
Revenue-based leases have multiple advantages:
• Long-term perspective
• Joint incentives
• Shared investments and risk
• Focus on productivity and profitability

A revenue-based lease is tied to the development of the hotel’s operation, with a percentage of the hotel’s sales paid to Pandox in the form of rent. When the hotel’s sales increase, so does Pandox’s rental income. Hotel property owners and hotel operators thus share the risk and they have joint incentives to increase the hotel’s profitability and, over time, also the hotel property’s value. In most of our leases there are also contractual minimum rent levels below which the rental income cannot fall. These cover the cost of capital for financing the properties. We also have a few fixed leases.

Strong interest in leases
The increased specialisation in the hotel market, where the operating model for growing regional hotel operators is to lease, has increased interest in leasing. Experiences from the pandemic have further strengthened the argument for revenue-based leases.

Adding green supplementary agreements to leases
In 2023 Pandox developed a template for adding green supplementary agreements to leases. This provides the basis for a joint and structured focus on the environment by Pandox and its tenants. During the year three agreements were signed to add green
supplementary agreements to leases: two with Scandic and one with Parks & Resorts. 

Share of total number of rooms



Own Operations

Function and advantages
The ability to operate a hotel ourselves is an important aspect of our active and engaged ownership. It allows us to make a wider variety of types of acquisitions and efficiently transform hotels with the aim of signing new leases. Our operation of hotels can be structured in various ways.

Franchise agreement
When we own both the hotel property and the hotel business, a franchise agreement with a brand owner may be appropriate. We can benefit from the franchiser’s brand and distribution activities. When Pandox is the franchisee we pay a royalty charge
based on the hotel’s sales. A few examples in our portfolio are Hilton Brussels Grand Place, Hotel Indigo Brussels – City and Hilton Garden Inn London Heathrow.

Independent brand
In a market where an international brand has a low recognition factor and the costs related to the brand and distribution are too high, it may be better to build an independent brand that we have created ourselves. One example in our portfolio is Hotel Hubert Brussels.

Management agreement
With a management agreement Pandox assigns a hotel operator to operate and manage the hotel. Pandox pays a management fee for this, which is often performance-based. The management agreement also requires a brand, which is usually franchised. As owner of the hotel property, with this agreement structure we have full financial responsibility for both the hotel’s operation and the hotel property. A few examples in our portfolio are DoubleTree by Hilton Bath, Queens Hotel Leeds and Novotel Hannover.

Share of total number of rooms