Whitbread has completed the sale-and-leaseback of two trading Premier Inn hotels to clients of CBRE Investment Management for £56m in a deal reflecting a net initial yield of 4.25%.
The company has sold the 137-bedroom hub by Premier Inn London Westminster St James’ Park in Central London and the 90-bedroom Premier Inn Oxford Westgate (pictured). A 30-year term with five-yearly CPI reviews (0-4%) was offered for both properties.
Mark Anderson, managing director for property and international at Whitbread, said: “We have a once-in-a-decade opportunity to grow our business here in the UK and take advantage of structural shifts in the hospitality market. As we continue to expand, we are thinking creatively about how we utilise Whitbread’s large and majority owned estate to our best advantage.
“This large network of freehold properties underpins Whitbread’s covenant strength and provides us many competitive advantages, including the ability to recycle capital back into the business through the sale and leaseback of a select number of our trading hotels. The strong demand from investors for the two Premier Inn hotels we recently brought to market demonstrates how well-regarded Whitbread-operated hotels are with investors looking for secure, long-term, and inflation-linked income.
“As we deliver our new five-year plan for the business, I can see us exploring similar opportunities in the future to fuel our network growth and fund investments elsewhere in the company that will help to extend our market leading position.”
Gerald Eve acted for Whitbread and Lewis Ellis and CBRE acted for CBRE Investment Management on the acquisition of the assets in London and Oxford, respectively
