LaSalle Investment Management, a subsidiary of JLL, has bought a 150-room budget hotel in London for £40 million from a syndicate of private investors.
The property, leased to Travelodge Hotels until 2043, is adjacent to Euston station the site of London’s forthcoming “HS2” high-speed rail connection to the West Midlands as well as a potential future site for Crossrail 2. The hotel's rent, which will be paid by Travelodge Hotels, will be linked to inflation, and the vendors identified the asset as having strong growth potential due to the strength of the location.
Euston is one of the UK’s main transport hubs, and the surrounding area—as well as that of nearby King’s Cross station—is undergoing one of the largest urban regeneration projects in Europe.
“We’re pleased to have originated and completed this off-market acquisition, which meets our investment criteria of investing in long-let, index-linked assets in strong locations,” said Sophie Simmonds, a fund manager at LaSalle Investment Management, in a statement. “There are a number of very strong medium- and long-term drivers that contribute to the asset’s attractive return profile over the remaining lease term. These include the devaluation of sterling encouraging both foreign visitors and permanent residents to holiday in the UK, London’s established position as one of the world’s leading hotel markets and the major redevelopment of Euston planned over the coming decade.”
“This is the latest of a number of inflation-linked assets that we have acquired; meeting strong demand from our clients to assist them with their liability matching investment strategies,” Alan Tripp, the head of UK at LaSalle Investment Management, added.
LaSalle was represented by John Miles & Company and Gerald Eve. The vendors were represented by James Routledge of Matthews & Goodman.