To give you the best user experience, our site would like to use cookies to store and access anonymous information through your browser.Close
For more details, view our privacy policy. Continued use of this site indicates you have accepted our policy.

This notice will appear the first time you visit the site on any computer

Press releases

Travelodge and Meghraj jointly launch £100 million property fund

17th Jun 2009


Travelodge and Meghraj have announced today that they are seeking to capitalise on current market conditions by launching a 100 million fund, Tamesis, to acquire going concern hotels from existing operators, banks and administrators.

Chaired by Malcolm King, former senior partner at King Sturge, Tamesis Capital has been established to purchase approximately 8 -14 hotels which will then be leased to Travelodge.

The Fund will seek to raise 40 million of equity, supplemented by 60 million of borrowings. 20 million has already been committed by Meghraj clients and Travelodge will invest a further 500,000.

Paul Harvey, Managing Director of Development at Travelodge, said:

"Since the summer of last year we have been contacted by a substantial number of owners and administrators who have been looking to sell their hotels to us as going concerns. What stopped negotiations moving forward on many of the sites were the excessive valuations placed on the properties.

Over the last two months however it has become clear that expectations on value have moved in our direction, meaning some exciting opportunities are presenting themselves."

Malcolm King, Chairman of Tamesis Capital, said:

"The Tamesis Fund has been established to satisfy strong investor demand for Travelodge hotels. The advantage of this Fund is that it offers three key elements for successful property investment: an excellent tenant with a strong brand and business plan, very long leases with RPI uplifts, and an attractive net initial yield. This has all the ingredients to be a great success."

The advantage for Travelodge in seeking expansion through acquisition is that going concerns can be delivered without the unpredictable lead time of the planning and construction process. The hotels are also often situated in mature markets where the budget hotel company does not currently have a strong presence.

Over the last 15 months Travelodge has acquired 13 hotels, including:

- Six hotels from Menzies in Edinburgh, Bath, Newcastle, Coventry, Oldham and Stevenage.

- Two hotels from Swallow in Scarborough and Edinburgh

- Three hotels from the administrators of the Real Hotel Company in Sheffield, Tewkesbury and Derby

Like the hotels listed above, many of the going concern hotels purchased by the Fund are likely to come from the vulnerable midmarket which is struggling in the current conditions. With the budget hotel sector predicted to double from its current size, the recession is likely to hasten the structural change occurring in the industry.

Paul Harvey continued:

"Having this Fund will enable Travelodge to move quickly and acquire hotels in mature markets, ensuring we leave the recession in a stronger position than we entered."

ENDS

Popular Travelodge Destinations