Real estate investment trust LondonMetric Property has acquired five hotels for £44.4 million ($60 million) as part of a larger United Kingdom property acquisition deal.
All the hotels were purchased from Whitbread, and all were affiliated with the company's Premier Inn brand.
LondonMetric Property is based in London and has another office in Birmingham. In a news release, the REIT the deal involved “£78.5 million of triple net lease acquisitions across five transactions, reflecting a net initial yield of 5.5% which is expected to increase to 6.3% over five years.”
LondonMetric added all the assets will provide it an additional £4.6 million of rent and have a weighted average unexpired lease term of 23 years.
All the hotels are in the Premier Inn economy-segment family and in England, with a total of 446 rooms. The hotels are the 80-room Premier Inn Chatham Gillingham Victory Pier Hotel in the county of Kent; 102-room Premier Inn Exeter Central St. David’s in Devon; 146-room Premier Inn Southampton Cumberland Place in Hampshire; 61-room Premier Inn Penzance in Cornwall; and 57-room Premier Inn Witney in Oxfordshire.
The hotel acquisitions comprise 56.6% of the overall deal.
Andrew Jones, LondonMetric’s CEO, said the deal is an opportunity to acquire “mission-critical assets let on very long leases to a Financial Times Stock Exchange 100 credit with guaranteed rental growth.”
“It adds to our [triple net lease] investment in budget hotels, which is benefitting from the ongoing shift in consumer spending towards experience, entertainment and convenience,” he added.
LondonMetric now owns a portfolio of 80 hotels in the U.K. across the budget and economy sectors. Its hotels are affiliated with brands from Leonardo Hotels, Premier Inn, QHotels and Travelodge.
In March 2024, the firm acquired and merged with peer REIT LXi. In its final interim report before the merger in Sept. 2023, REIT LXi reported it had a portfolio of 135 Travelodge hotels that accounted for 18.1% of its rental revenue.
LondonMetric owns and manages a real estate portfolio valued at £7 billion, according to the London Stock Exchange.