Travelodge Hotel, Tipton Road, Dudley, DY1 4TA
sold
Aviva Investors, represented by Atlas Real Estate, 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.
