Riverside Capital has contracted to sell its Travelodge in Torquay for £8.50 million, reflecting a net initial yield of 4.43% based on the existing rent passing.
The 90-bedroom hotel, acquired in September 2015, has been sold ahead of plan and shows an IRR of 17.29%. The transaction is due to complete in March with the lease subject to an open RPI uplift in September this year.
Its sale once again highlights the thirst for index linked income within the budget hotel sector.
Ashley Wilcox, Investment Director at Riverside Capital, said: “We are delighted with the upside returns generated by this deal which have been secured ahead of schedule. Our original business plan specified increased demand for long income and the growth in the budget hotel sector as key dynamics in implementing its success. Delivery on both fronts has been particularly pleasing”.
Levy LLP and Brown Cooper Marples acted jointly for Riverside Capital with Springer Nicolas acting for the purchaser.