Lothbury Investment Management Buys 202 room Travelodge, Southwark, London

Main Photo: The Travelodge Southwark

Date: August 2017

Location: Union Street, Southwark, London,UK

Name: The Travelodge Southwark

No. of Keys: 202

Seller: Glebe Asset Management

Buyer: Lothbury Investment Management has bought the hotel in London on behalf of a UK pension fund. The property has an index-linked lease with 30 years to run.

The acquisition reflects both the lease income, and longer term redevelopment opportunities. The deal is the second London Travelodge traded in a week.

The freehold property comprises 202 bedrooms with three retail/restaurant units totalling 7,250sqft at ground level. The building was constructed in 2008.

Lothbury said the acquisition is part of its strategy for this mandate to acquire prime assets, with index-linked rent reviews and strong residual or alternative use values.

Mike Toft, a senior fund manager and executive director of Lothbury Investment Management, said: “This is an important purchase for the fund. With 30 years remaining and reviews linked to RPI, with no cap, it has a very attractive lease structure and excellent residual value that fits well within the portfolio of prime assets held for this major UK pension fund.

“Its location next to Southwark Underground station and close to the South Bank of the River Thames is well established but also rapidly evolving, so will provide the fund with attractive longer-term redevelopment opportunities.”

Lothbury was advised by Tydus Real Estate and NJB Hotels & Leisure, and the vendor was advised by CBRE.

Also this week, Aberdeen Standard Investments sold the Travelodge London Brent Cross to a private investor for £16m.

The newly refurbished 128-bedroom property also has a bar café and separate ground-floor office accommodation which is let to the Secretary of State for Housing, Communities and Local Government.

Shaun Roy, head of hotels at Knight Frank, which advised Aberdeen Standard Investments on the sale, said the purchaser was “encouraged by the improving covenant of Travelodge and the robust hotel market” and was “keen to invest in a fixed income asset in London”.

Tom Elviss, assistant fund manager at Aberdeen Standard Investments, said the disposal “crystallised a significant profit to the fund following the comprehensive redevelopment of the asset in 2016/2017 to facilitate the change of use from an office to a hotel which had been pre-let to Travelodge”.

Price: £56.3m

Price per Key: £278, 713

THPT Comment: Travelodge still proves to be value for money for investment purposes. This post is somewhat old! The deal actually happened in 2017!

First Seen: The Caterer

The Hotel Property Team (THPT) is a small group of highly experienced business professionals. Between us, we provide a range of skills and experience which is directly relevant to those involved in the hotel property market.

For more information – Visit www.thpt.co.uk or email info@thpt.co.uk