Whitbread completes £56m sale-and-leaseback

Whitbread has completed a sale-and-leaseback of two Premier Inns to CBRE IM for £56m. The deal price reflects at 4.25% yield. Whitbread has signed 30-year leases back on the two hotels – a 137-bedroom Premier Inn in Westminster and a 90-bedroom Premier Inn in Oxford city centre – with five-yearly CPI-linked reviews. Mark Anderson, managing director for property and international at Whitbread, said: “We have a once-in-a-decade opportunity to grow our business here in the UK and take advantage of structural shifts in the hospitality market. As we continue to expand, we are thinking creatively about how we utilise Whitbread’s large and majority owned estate to our best advantage. This large network of freehold properties underpins Whitbread’s covenant strength and provides us many competitive advantages, including the ability to recycle capital back into the business through the sale and leaseback of a select number of our trading hotels.” He added: “The strong demand from investors for the two Premier Inn hotels we recently brought to market demonstrates how well-regarded Whitbread-operated hotels are with investors looking for secure, long-term, and inflation-linked income. As we deliver our new five-year plan for the business, I can see us exploring similar opportunities in the future to fuel our network growth and fund investments elsewhere in the company that will help to extend our market-leading position.” Gerald Eve acted for Whitbread on the deal; Lewis Ellis advised CBRE IM on the Westminster acquisition, with CBRE advising on Oxford. Photos from Whitbread