Whitbread Plc announces the sale and leaseback of two prime London sites
Whitbread announced that it has completed two sale and leaseback transactions in prime London hotels.
Whitbread has concluded with M&G Investments for the sale and leaseback of its 339 room hub by Premier Inn hotel in Tothill Street, Westminster due to open in October 2017, in exchange for a 25 year lease agreement. M&G Investments will pay £101.825 million in cash for the property, with an initial payment of £73.7 million on exchange, with a final balancing payment being made on completion of the hotel in October 2017.
Separately Whitbread has also concluded with Aviva Investors for the sale and leaseback of its 326 room Premier Inn in West Smithfield, Farringdon, due to open in December 2018, in exchange for a 25 year lease agreement. Aviva Investors will pay £102.86 million in cash for the property, with an initial payment of £66.0 million on exchange, with a final balancing payment being made on completion of the hotel in December 2018.
These deals have both been completed against a net initial yield of just under 4% against an annual rent of £4.20 million and £4.24 million respectively. Total proceeds from sale and leaseback transactions this year are now expected to be around £200 million.
Nicholas Cadbury, Group Finance Director of Whitbread PLC commented:
“Following the success of our forward funding deal of hub by Premier Inn at Kings Cross in July 2016, I am delighted to announce the sale and leaseback of two additional prime London sites in Tothill Street and West Smithfield. These agreements highlight the strength of Whitbread’s covenant and the strong asset backing to our balance sheet and align with our property strategy to carry out modest sale and leaseback transactions to recycle capital into strong returning new growth opportunities in the UK and Germany.”