UBS Asset Management’s (UBS-AM) Real Estate & Private Markets (REPM) has acquired a Scottish hotel on behalf of its long income UK property vehicle. The buyer has paid €10.3 million for the asset.

The five-storey property with 73 en-suite bedrooms, was acquired from a private investor and will continue to be operated by Travelodge Hotels on a long-term lease running to 2042.

The manager said the acquisition, that is in line with the fund’s investment strategy, further diversifies the tenant mix within the fund, supports the fund’s distribution yield and enhances the portfolio’s weighted average unexpired lease term.

Jonathan Hollick, head of transactions for REPM’s real estate UK team, said: “The stable long-term, indexed cashflow offers attractive income distribution for the fund’s investors while also providing diversification benefits to the rest of their fixed income and property portfolios.”

He added, “Moreover, the performance of Edinburgh’s hotel market is second only to London in terms of occupancy and RevPAR growth, and with the Haymarket regeneration scheme set to add further value to a city already receiving above-average levels of hotel occupancy, we expect this acquisition to provide strong returns for our investors.”

Source: IPE

Fulya Altunyay/[email protected]