Riverside Capital has exchanged contracts to purchase four new-build hotels, let to Travelodge Hotels Limited on 25 year leases.
The hotels, located in Weston Super Mare, Andover and King’s Lynn, have been purchased by way of two forward commitments and one forward funding.
Riverside Capital is now raising equity from its investor base for this investment opportunity.
Royal Bank of Scotland International provided senior debt for the three properties.
Leases to Travelodge on all properties have five yearly, upward only rent reviews, linked to either the retail or consumer price indexes. The term of the investment is approximately 5 years, with an average net initial yield of 5.99%.
Dominic Wright, Chief Executive at Riverside Capital, comments: “We are delighted to have secured this investment for our international private investor base. Given the trading figures that have emerged from Travelodge this week, showing EBITDA of over £100 million for the first time, these assets provide long, secure income and significant potential for capital growth”.