- The 66 inns will likely be acquired on a freehold and lengthy leasehold foundation enabling the Travelodge group to take management of the property, enhancing worth
- The property will likely be acquired by way of a newly createdproperty holding group, below a brand new Travelodge group holding firm, benefitting from assist to drive additional development from its proprietor, GoldenTree Asset Administration (GTAM)
- The inns cowl a large geography, together with London, the Midlands and the North of England throughout Metropolis Centre and roadside places
- The transaction comes after Travelodge reported record-breaking Q3 ends in November, with income up 16.7% to £782.0 million and underlying earnings (adjusted EBITDA) up 22.4% to £201.2 million
- Travelodge seems to be ahead to persevering with to work with LXi, with whom it has loved a robust working relationship over a few years, and who stay its largest landlord
- The Travelodge group plans to discover additional freehold alternatives, which might additional diversify Travelodge’s freehold/leasehold asset base
Travelodge, the UK’s first funds lodge model which operates practically 600 inns, at present publicizes that it has exchanged contracts to accumulate 66 Travelodge-branded inns on a freehold and lengthy leasehold foundation from its largest landlord, LXi REIT plc (“LXi”), for a mixed sum of £210 million.
The acquired portfolio consists of inns in London, regional Metropolis Centres (Birmingham, Tub, Leeds, Liverpool), and roadside places.
Travelodge operates a well-diversified, high-quality community of inns positioned in main cities and cities throughout the UK. The enterprise is effectively underway with its lodge refit programme – its most vital model transformation to this point – with plans to speed up this funding and improve roughly 50% of the room property by the top of 2024. The programme features a new lodge design that includes a brand new model reception space, next-generation rooms with bedside charging ports and blackout curtains and upgraded bar cafes.
The acquisition of 66 Travelodge inns from LXi REIT, with assist from our proprietor GoldenTree Asset Administration, will mark a constructive step for Travelodge as we search to optimise our lodge portfolio and diversify our freehold/leasehold break up to boost worth. The brand new construction will present us with a platform to discover additional freehold acquisitions. Now we have practically 4 a long time of experience in working funds inns and we sit up for persevering with to put money into our lodge community to drive development.
We’re happy to announce this transaction with LXi, with whom we’ve got loved a robust working relationship over a few years. We sit up for persevering with to work with LXi, who stay our largest landlord, with the 69 Travelodge inns they proceed to personal. Jo Boydell, Travelodge Chief Government of Travelodge
We’re delighted to be transacting with Travelodge on this landmark sale of 66 inns for £210 million, which is in keeping with the newest guide worth. A lot of the sale proceeds will likely be used to pay down debt, lowering Group LTV to 34%, and Travelodge’s proportion of Group lease will scale back to 11%. The sale and debt compensation usually are not anticipated to have a fabric affect on the Firm’s earnings.
Travelodge function a best-in-class inns enterprise and the agency dedication of its house owners to the enterprise is demonstrated by their assist to allow the acquisition of 66 of its property. Simon Lee, CEO of LXI REIT Advisors
The transaction comes after Travelodge reported record-breaking Q3 monetary ends in November 2023, with double digit income development of 16.7% to £782 million and underlying earnings (adjusted EBITDA) up 22.4% to £201.2 million. This robust efficiency displays continued demand from Travelodge’s numerous vary of leisure and enterprise prospects who search inexpensive, high quality lodging.
Travelodge continues to see important development alternatives within the UK, with over 300 goal places recognized following a complete evaluate of gaps out there. Moreover, the corporate will proceed to evaluate extension alternatives throughout its present property. The enterprise has additionally established a worthwhile market presence in Spain, working six inns together with its third in Madrid which opened final 12 months, and has recognized an extra 20 goal places throughout the nation.
The transaction is predicted to finish on 28 February 2024. The acquisition worth for the transaction is predicted to be funded by way of a mixture of an extra shareholder funding from GTAM, the proceeds of a 3rd occasion financing facility secured on the property acquired within the transaction, and roughly £35 million of money from Travelodge. The newly created property holding group that can purchase the property will likely be held by a newly fashioned guardian firm of Thame and London Restricted and won’t assure or be topic to the covenants below the present Travelodge senior secured notes due 2028.
This announcement comprises statements reflecting assumptions, expectations, projections, intentions or beliefs about future occasions which are supposed as “forward-looking statements”. A lot of dangers and uncertainties might trigger our precise outcomes to vary materially from present projections, forecasts, estimates and expectations regarding us. Specifically, the property buy transaction will not be accomplished on the phrases described herein, or in any respect. Our forward-looking statements could be affected by inaccurate assumptions or by identified or unknown dangers, uncertainties and different components, a lot of that are past our management. All or any of those forward-looking statements could become incorrect.
About Travelodge
In 1985, Travelodge grew to become the UK’s first funds lodge model when it opened its first lodge at Barton-under-Needwood. At this time, we function practically 600 inns throughout the UK, Eire and Spain and yearly welcome over 21 million visitors.
With rooms from £35, Travelodge is the perfect base for all enterprise and leisure journeys and we intention to supply prospects the placement, worth and high quality to go well with all their journey wants.
We’re at present trying to broaden our UK lodge community and we’ve got recognized an extra 300 places the place we wish to open a Travelodge lodge.
Travelodge employs over 12,000 staff and is devoted to creating an atmosphere the place everybody can be taught extra, earn extra and belong.
