- The 66 accommodations 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 via a newly createdproperty holding group, beneath a brand new Travelodge group holding firm, benefitting from help to drive additional progress from its proprietor, GoldenTree Asset Administration (GTAM)
- The accommodations cowl a large geography, together with London, the Midlands and the North of England throughout Metropolis Centre and roadside areas
- 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 appears 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 practically 600 accommodations, immediately publicizes that it has exchanged contracts to accumulate 66 Travelodge-branded accommodations 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 contains accommodations in London, regional Metropolis Centres (Birmingham, Bathtub, Leeds, Liverpool), and roadside areas.
Travelodge operates a well-diversified, high-quality community of accommodations positioned in main cities and cities throughout the UK. The enterprise is properly underway with its lodge refit programme – its most vital model transformation to this point – with plans to speed up this funding and improve roughly 50% of the room property by the tip of 2024. The programme features a new lodge design that includes a brand new type reception space, next-generation rooms with bedside charging ports and blackout curtains and upgraded bar cafes.
The acquisition of 66 Travelodge accommodations from LXi REIT, with help 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. Now we have practically 4 a long time of experience in working price range accommodations and we sit up for persevering with to spend money on our lodge community to drive progress.
We’re happy to announce this transaction with LXi, with whom we now have loved a powerful working relationship over a few years. We sit up for persevering with to work with LXi, who stay our largest landlord, with the 69 Travelodge accommodations 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 accommodations for £210 million, which is in step with the most recent e-book worth. Many of the sale proceeds will probably be used to pay down debt, lowering Group LTV to 34%, and Travelodge’s proportion of Group hire will cut back to 11%. The sale and debt compensation usually are not anticipated to have a cloth affect on the Firm’s earnings.
Travelodge function a best-in-class accommodations enterprise and the agency dedication of its house owners to the enterprise is demonstrated by their help 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 areas recognized following a complete overview of gaps available in the market. Moreover, the corporate will proceed to overview extension alternatives throughout its current property. The enterprise has additionally established a worthwhile market presence in Spain, working six accommodations together with its third in Madrid which opened final 12 months, and has recognized an extra 20 goal areas throughout the nation.
The transaction is anticipated to finish on 28 February 2024. The acquisition worth for the transaction is anticipated to be funded via a mixture of an extra shareholder funding from GTAM, the proceeds of a 3rd get together 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 may purchase the property will probably be held by a newly shaped guardian firm of Thame and London Restricted and won’t assure or be topic to the covenants beneath the prevailing Travelodge senior secured notes due 2028.
This announcement accommodates statements reflecting assumptions, expectations, projections, intentions or beliefs about future occasions which are supposed as “forward-looking statements”. A variety of dangers and uncertainties may trigger our precise outcomes to vary materially from present projections, forecasts, estimates and expectations referring to us. Particularly, the property buy transaction will not be accomplished on the phrases described herein, or in any respect. Our forward-looking statements could be affected by inaccurate assumptions or by identified or unknown dangers, uncertainties and different elements, a lot of that are past our management. All or any of those forward-looking statements might transform incorrect.
About Travelodge
In 1985, Travelodge grew to become the UK’s first price range lodge model when it opened its first lodge at Barton-under-Needwood. Right this moment, we function practically 600 accommodations throughout the UK, Eire and Spain and yearly welcome over 21 million friends.
With rooms from £35, Travelodge is the perfect base for all enterprise and leisure journeys and we intention to supply clients the placement, worth and high quality to go well with all their journey wants.
We’re at present seeking to increase our UK lodge community and we now have recognized an extra 300 areas the place we wish to open a Travelodge lodge.
Travelodge employs over 12,000 staff and is devoted to creating an surroundings the place everybody can study extra, earn extra and belong.
