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LondonMetric Property has announced it has acquired nine Premier Inn hotels in a £89m deal.
The deal reflects a net initial yield of 5.3% which will compound over the lease term. The portfolio was acquired from Whitbread through a sale and leaseback agreement. The properties are let on new 30-year leases and generate an annual rent of £5m.
LondonMetric said rent reviews will take place every five years and are linked to the consumer price index. The purpose-built hotels are located in the South East and provide 955 bedrooms.
Locations include Southampton Airport, Kings Langley, Milton Keynes, Poole, Colchester, Fareham, Waltham Abbey, Chipping Norton, and Warwick. Whitbread is now the fourth largest occupier for the company.
The hotel operator contributes £11.3m of annual rent to the business. This figure accounts for 2.7% of the total rent collected by LondonMetric.
The transaction follows a previous £44m acquisition of hotels from the same seller. LondonMetric now owns 22 Premier Inn hotels across its national property portfolio.
Chief executive Andrew Jones said: “This transaction adds high quality and mission critical assets that generate a long, strong and growing NNN income in a sector that continues to benefit from evolving consumer preferences for travel, entertainment and experience.”
