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Thu 12th Jan 2017 - Whitbread completes sale and leaseback of two London hotels, expects to net £200m from such deals this year
Whitbread completes sale and leaseback of two London hotels, expects to net £200m from such deals this year: Whitbread has completed the sale and leaseback of two hotels in London and now expects to net £200m from such deals this year. The company has concluded with M&G Investments for the sale and leaseback of its 339-bedroom 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 £101.825m in cash for the property, with an initial payment of £73.7m 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-bedroom Premier Inn in West Smithfield, Farringdon, due to open in December 2018, in exchange for a 25-year lease agreement. Aviva Investors will pay £102.86m in cash for the property, with an initial payment of £66.0m 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 almost 4% against an annual rent of £4.20m and £4.24m respectively. Total proceeds from sale and leaseback transactions this year are now expected to be about £200m. Whitbread said the transactions were in line with its property strategy to “carry out modest sale and leasebacks in order to recycle capital into strong returning new growth opportunities, and are further evidence of how we optimise our significant property portfolio”. Finance director Nicholas Cadbury said: “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.”


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