REIT buys portfolio of 55 budget Travelodge hotels

Secure Income REIT has agreed to buy a portfolio of 55 hotels leased to budget operator Travelodge in a deal worth £196.2 million, subject to a share placing that should raise £140 million. The deal will also be financed by a new £60-million, seven-year funding package.

The portfolio includes Oxford Peartree, Edinburgh Central and Manchester Central. Hotels at Exeter M5, Milton Keynes Central, Southampton, Northampton Upton Way, Ely and Nottingham Riverside are also included.

The hotels reportedly generate £13.7 million in rent per year, and have an average unexpired lease term of 27 years.

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"The acquisition expands and diversifies Secure Income REIT's asset base through the purchase, at an attractive yield, of a portfolio of long-lease assets in a highly robust sector, let to the UK's second largest budget hotel chain," said Martin Moore, independent non-executive chairman of Secure Income REIT.

Prestbury Investments reportedly worked on the deal.

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