Travelodge, the UK’s only low-cost hotel chain, is seeking to raise at least £400m from the sale and leaseback of 136 hotels. With keen interest already being expressed from both domestic and international buyers, CB Richard Ellis (CBRE) has been instructed to market the portfolio to a closed list of investors.
The portfolio of hotel properties is one of the largest offered to the market. The properties all occupy prime city centre, airport and roadside locations situated throughout England, Scotland and Wales. Each property will be secured either on a 25-year or 35-year lease.
Travelodge are seeking to take advantage of the current strength of demand for property and the historically high prices that are being achieved in the market. This high level of demand is being driven, according to CBRE estimates, by £8 billion of cash waiting to be invested in the sector.
Grant Hearn, Travelodge CEO said:
“Travelodge is planning to significantly accelerate the roll-out of its successful trading format having already developed over 240 low cost hotels across the UK and Ireland and recently opened two newly acquired hotels in Central London.
We are playing a leading role in changing the structure of the UK accommodation market, which is increasingly driven by value and quality. This move positions Travelodge both operationally and financially to accelerate our successful low cost hotel model.
We have decided to raise cash in this way as a result of the very keen prices we have received on recent individual asset sales. The sale will also allow us to reduce our cost of funding by paying down a large proportion of our existing debt, while still leaving us with the flexibility to take advantage of other attractive investment opportunities.”
12 July 2004
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Matthew Smallwood