LXi REIT has exchanged contracts unconditionally on the sale of 66 Travelodge branded hotels to the Travelodge group for £210 million.
As announced on 22 November 2023, the majority of the sale proceeds will be used to pay down debt, reducing Group LTV to 34% from 38% and reducing Travelodge’s proportion of Group rent to 11% from 18%.
The sale and debt repayment are not anticipated to have a material impact on the company’s earnings given the debt cost savings, the REIT said.
Completion of the sale is scheduled to occur on 28 February 2024.
Commenting on the transaction Simon Lee, CEO of LXI REIT Advisors, said: “We are delighted to be transacting with Travelodge on this landmark sale of 66 hotels for £210 million, which is in line with the latest book value. Most of the sale proceeds will be used to pay down debt, reducing Group LTV to 34%, and Travelodge’s proportion of Group rent will reduce to 11%. The sale and debt repayment are not expected to have a material impact on the Company’s earnings. Travelodge operates a best-in-class hotels business and the firm commitment of its owners to the business is demonstrated by their support to enable the purchase of 66 of its assets.”
Jo Boydell, Chief Executive of Travelodge, said: “The acquisition of 66 Travelodge hotels from LXi REIT, with support from our owner GoldenTree Asset Management, will mark a positive step for Travelodge as we seek to optimise our hotel portfolio and diversify our freehold/leasehold split to enhance value. The new structure will provide us with a platform to explore further freehold acquisitions. We have nearly four decades of expertise in operating budget hotels and we look forward to continuing to invest in our hotel network to drive growth.”