Riverside Capital has sold a Premier Inn hotel in Camberley for £8.465 million, returning 1.43x equity to its investors. The acquisition, reflecting a net initial yield of 4.97%, was completed by AEW UK Long Lease REIT Plc on 12 September 2017.
The 95 bedroom, long leasehold hotel located on Park Street, Camberley is let to Premier Inn Hotels until 2037 with 5 yearly rent reviews. The lease is index linked to CPI, subject to maximum yearly increases of 5%.
Its sale, at 4.97%, demonstrates continuing growth in the budget hotel sector, largely driven by the strength of the Premier Inn and Travelodge Hotels covenants.
Ashley Wilcox, Investment Director at Riverside Capital, said: “This deal demonstrates the continuing thirst for performance-linked income, leased to secure covenants. Since the EU referendum, the budget hotel sector has continued to grow and has outperformed many other sectors.”
Cushman & Wakefield acted on behalf of AEW UK Long Lease REIT Plc, with Levy Real Estate LLP acting for Riverside Capital.