Frank-Steier Price Ltd. Leading niche commercial property investment practice Logo for Midlands Property Awards 09

August 2017

Travelodge Hotel, Tipton Road, Dudley, DY1 4TA

Brand Approved

Aviva Investors, represented by FSP, has recently completed the acquisition of a new Travelodge Hotel on the edge of Dudley town centre.

The property comprises a 78 bed hotel with 48 cover restaurant and 72 car parking spaces.

The property is let to The Borough Council of Dudley for a term of 25 years from August 2017.  The lease is held on full repairing and insuring terms with 5 yearly reviews to compounded RPI collared at 1% and capped at 4% pa compounded.  The commencing rent is £279,706 per annum.  The tenant has the option to renew the lease for a term of 25 years subject to tenant options to break the lease in the 10th and 20th years, subject to 6 months notice.

The tenant has simultaneously sublet the property to Travelodge Hotels Ltd on the same terms at a rent of £329,706 per annum (£4,227per room).  This will deliver the Council a profit rent of £50,000 per annum.

The development funding sold for £5,829,430 which reflected a net initial yield of 4.50%.  The property was acquired from Hinton Group, who acted as developer.