Travelodge agrees to amass 66 Travelodge-branded motels from its largest landlord
The 66 motels will probably be acquired on a freehold and lengthy leasehold foundation enabling the Travelodge group to take management of the property, enhancing worth
The property will probably be acquired by way of a newly createdproperty holding group, beneath a brand new Travelodge group holding firm, benefitting from assist to drive additional progress from its proprietor, GoldenTree Asset Administration (GTAM)
The motels 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 ahead to persevering with to work with LXi, with whom it has loved a powerful 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 price range lodge model which operates almost 600 motels, at present declares that it has exchanged contracts to amass 66 Travelodge-branded motels 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 motels in London, regional Metropolis Centres (Birmingham, Tub, Leeds, Liverpool), and roadside places.
Travelodge operates a well-diversified, high-quality community of motels positioned in main cities and cities throughout the UK. The enterprise is effectively underway with its lodge refit programme – its most important 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 motels from LXi REIT, with assist from our proprietor GoldenTree Asset Administration, will mark a optimistic step for Travelodge as we search to optimise our lodge portfolio and diversify our freehold/leasehold cut up to reinforce worth. The brand new construction will present us with a platform to discover additional freehold acquisitions. We’ve almost 4 a long time of experience in working price range motels and we look ahead to persevering with to put money into our lodge community to drive progress.
We’re happy to announce this transaction with LXi, with whom we have now loved a powerful working relationship over a few years. We look ahead to persevering with to work with LXi, who stay our largest landlord, with the 69 Travelodge motels they proceed to personal. Jo Boydell, Travelodge Chief Govt of Travelodge
We’re delighted to be transacting with Travelodge on this landmark sale of 66 motels for £210 million, which is consistent with the most recent ebook worth. A lot of the sale proceeds will probably be used to pay down debt, decreasing Group LTV to 34%, and Travelodge’s proportion of Group lease will scale back to 11%. The sale and debt compensation should not anticipated to have a cloth influence on the Firm’s earnings.
Travelodge function a best-in-class motels enterprise and the agency dedication of its homeowners 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 progress 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 various vary of leisure and enterprise clients who search reasonably priced, high quality lodging.
Travelodge continues to see important progress alternatives within the UK, with over 300 goal places recognized following a complete evaluate of gaps available in the market. Moreover, the corporate will proceed to evaluate extension alternatives throughout its current property. The enterprise has additionally established a worthwhile market presence in Spain, working six motels together with its third in Madrid which opened final yr, and has recognized an additional 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 mix of an additional 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 probably be held by a newly fashioned guardian firm of Thame and London Restricted and won’t assure or be topic to the covenants beneath the present Travelodge senior secured notes due 2028.
This announcement accommodates statements reflecting assumptions, expectations, projections, intentions or beliefs about future occasions which can be meant as “forward-looking statements”. Quite a few dangers and uncertainties might trigger our precise outcomes to vary materially from present projections, forecasts, estimates and expectations referring to us. Specifically, the property buy transaction is probably not accomplished on the phrases described herein, or in any respect. Our forward-looking statements will 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 transform incorrect.
About Travelodge
In 1985, Travelodge turned the UK’s first price range lodge model when it opened its first lodge at Barton-under-Needwood. As we speak, we function almost 600 motels throughout the UK, Eire and Spain and yearly welcome over 21 million friends.
With rooms from £35, Travelodge is the best base for all enterprise and leisure journeys and we intention to supply clients the placement, worth and high quality to swimsuit all their journey wants.
We’re at present seeking to increase our UK lodge community and we have now recognized an additional 300 places the place we want to open a Travelodge lodge.
Travelodge employs over 12,000 workers and is devoted to creating an surroundings the place everybody can be taught extra, earn extra and belong.
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