Real estate investment firm LondonMetric Property has acquired nine Premier Inn hotels in the United Kingdom from publicly listed hotel firm Whitbread PLC for £89 million ($120 million).
In doing so, it has become Whitbread’s fourth-largest occupier, “contributing £11.3 million of annual rent and accounting for 2.7% of LondonMetric’s total rent.”
In September, LondonMetric completed a £44 million, five-hotel acquisition from Whitbread, and now it owns 22 Premier Inn hotels.
LondonMetric said its latest deal with Whitbread reflected a net initial yield of 5.3%, which will compound over the length of the agreed sales-and-leaseback timeline of 30 years.
The acquisition will generate “an annual rent of £5 million with five-yearly consumer price index-linked rent reviews and very strong levels of rent cover," according to the news release accompanying the deal announcement.
The nine hotels are all in the south and southeast of England, in the towns and cities of Chipping Norton, Oxfordshire; Colchester, Essex; Fareham, Hampshire; Kings Langley, Hertfordshire; Milton Keynes, Buckinghamshire; Poole, Dorset; Southampton, Hampshire, Waltham Abbey, Essex; and Warwick, Warwickshire.
In total the portfolio has 955 rooms.
Noting the same business trends and upside as when his firm bought the Whitbread portfolio last September, Andrew Jones, LondonMetric’s CEO, said, “this transaction adds high-quality and mission-critical assets that generate a long, strong and growing [triple net lease] income in a sector that continues to benefit from evolving consumer preferences for travel, entertainment and experience."
In March 2024, LondonMetric acquired and merged with real estate investment trust LXi, which at that juncture owned 135 hotels in Premier Inn’s largest U.K. budget-segment competitor, Travelodge.