Travelodge Completes £128m Sale Leaseback of 17 UK Hotels

The Times - April 28, 2007

Travelodge, the budget hotel operator controlled by Dubai International Capital (DIC), has raised £128 million through a sale and leaseback of 17 of its hotels, The Times has learnt.

The company, which operates 314 hotels, the majority in the UK, is selling the underlying property assets to Prestbury, the property investment vehicle controlled by Nick Leslau. It will lease back the hotels for periods of between 25 years and 35 years.

It is the second sale and leaseback Travelodge has signed with Prestbury. Three years ago it raised £400 million from the dispsoal of 136 hotels to Mr Leslau’s vehicle, enbling it to step up its rapid rate of expansion. The 17 hotels in the latest deal, two of which are in London, are properties that have been added to the chain since the first transaction. About £100 million of the proceeds will be used to reduce Travelodge’s £500 million debt burden, with the balance to be invested in expansion.

Mr Leslau is expected to inject both packages of Travelodge properties into the £2 billion real estate investment trust (Reit) that he is planning to float on the London Stock Exchange. The Reit also includes properties run by Punch Taverns and Southern Cross Healthcare. Sphere: Related Content