Brighton Seafront Travelodge

Travelodge has over 500 hotels and 38,000 rooms throughout the UK and, by Autumn 2014, 80% will have been refitted to our new brand standard, as part of our £86 million refurbishment of the whole estate. New openings remain an important part of our strategy and last year we opened seven new hotels. This year we will open 11 more, six of them in London.

With trading performance showing material year-on-year gains, investor confidence in Travelodge’s covenant has resulted in a significant number of Travelodge-lease investment transactions during the last 12 months. This has caused yields to harden and we expect this to continue over the next 12 months. Tony O’Brien, UK Development Director, Travelodge Hotels

Travelodge Investment Deals Q2 2014

Brighton Seafront Travelodge

Scottish Widows Investment Partnership purchased the Brighton Seafront Travelodge from Aviva Investors.

January: Purchase price - £15.2m

Yield – 6.3%

Taunton Travelodge

RO Developments has purchased the 64-bed Taunton Travelodge.

Alongside this hotel, RO Developments also developed and owns the Lytham St Annes Travelodge.

Richard Bourne, Development Director for RO Developments, said:

“The acquisition provides us with a long term secure income with kickers and is part of our ongoing strategy to improve the quality of income in our portfolio.”

January: Purchase Price - £2.56m

Yield – 6.43%

Taunton Travelodge

Hereford Travelodge

Knight Frank Investment Management, on behalf of a client, purchased Hereford Travelodge. JLL acted on behalf of the vendor.

This follows on from Knight Franks December purchase of the Chester Travelodge.

John Styles, Head of Fund Management at Knight Frank Investment Management, said:

“The investment provides a secure long term income stream with rental increases pegged to inflation, which meets our client’s objectives of providing income and capital preservation in real terms in the long run.”

February: Purchase price - £2.74m

Yield – 6.5%

Hereford Travelodge

Hemel Hempstead Gateway Travelodge

LaSalle Investment Management on behalf of Coal Pension Properties has purchased the 108-bed Hemel Hempstead Gateway Travelodge.

The mixed-use scheme also includes three retail units on the ground floor, occupied by Domino Pizza, Subway and Toby Carvery.

March: Purchase Price - £7.65m

Yield – 6.71%

Hemel Hempstead Gateway Travelodge

Manchester Central Arena Travelodge

Orchard Street Investment Management purchased on behalf of St James Place Property Unit the Manchester Arena Travelodge in an off-market deal with the BP Pension Fund.

The hotel is let to Travelodge on a 35 year lease with RPI linked reviews.

Barney Rowe, partner at Orchard Street, commented:

“The acquisition of this popular Travelodge asset in central Manchester enables us to benefit from exposure to inflation linked rental growth.”

March: Purchase Price - £14.2m

Yield – 5.65%

Manchester Central ArenaTravelodge

Portsmouth Hilsea Travelodge

Vauxhall Estates purchased the Travelodge Portsmouth Hilsea Hotel from a private client of Philips Lockhart Starr.

Dave Moxom of Turner Locker Barnfield, who represented Vauxhall Estates, commented:

“Our clients were seeking a secure investment with good growth and the strength of the Travelodge covenant, combined with reviews linked to RPI, made this an ideal opportunity.”

April: Purchase Price - £1.66m

Yield – 6%

High Wycombe Travelodge

Legal & General Property, on behalf of its Linked Pensions Fund, purchased the High Wycombe Travelodge and three retail units from McLaren Property for £11,005,000, reflecting an NIY of 6.8%. The hotel is let to Travelodge on an FRI lease for 25 years. One of the retail units is vacant, with the others let to Sports Direct and Sassy & Co Hair & Beauty. Will Edwards of Legal & General Property commented: “This transaction is in line with Fund strategy, as it offers increased exposure to index-linked retail growth in an alternative asset class.”

April: Purchase Price - £11m

Yield – 6.8%

London Enfield Travelodge

Redefine International has acquired the Travelodge Enfield Hotel for £10m, representing a NIY of 5.5%. Located in the Lumina Park development, adjacent to the A10, the investment comprised a 132-room Travelodge and a ground floor retail unit, which is currently vacant. Mike Watters, Chief Executive of Redefine International, commented: “The acquisition provides a good opportunity to acquire long-dated, uncapped RPI income from a good quality covenant…We are now beginning talks with a number of convenience supermarket operators to let the vacant retail unit, which will further improve the asset’s yield profile.”

June: Purchase Price - £10m

Yield – 5.5%

Portsmouth Hilsea Travelodge

High WycombeTravelodge

London Enfield Travelodge