UK-based investors LXi REIT forward purchased the 68-room pre-let Premier Inn Hotel and Beefeater restaurant at Spanish City Promenade, Whitley Bay, North Tyneside, for €7.5 million. The firm pre-let the property to Premier Inn Hotels for 25 years from completion of the building work. The term includes a one-off tenant break at the end of the 20th year.
The company paid a 10-percent deposit with the balance of the price to be paid on the early-June 2017 completion of the purchase. The hotel purchase reflected a 5-percent net yield on the asset acquisition.
LXi REIT will fund the new hotel and the restaurant from equity resource, with senior debt finance introduced in the near term.
The Premier Inn property is located at the southern end of Whitley Bay beach, adjacent to the historic Spanish City Dome.
Simon Lee, partner of LXi REIT Advisors, said in a statement, "We are pleased to be forward purchasing this new Premier Inn Hotel and Beefeater restaurant at an attractive yield. The hotel and restaurant sectors are performing very well and the property, which represents our fifth acquisition since listing on 27 February, will provide the company with a very long, inflation-linked income fully underpinned by the strong Premier Inn covenant. We are also at an advanced stage on the acquisition of a number of additional forward funding and built assets, across a wide range of property sectors, which meet the company's investment objective and which should exchange shortly."
The firm also completed two other acquisitions announced on March 10 and 22, 2017, respectively—the Cramlington GE Oil & Gas facility and the Haverhill, Essex Travelodge hotel.