Whitbread has completed a c£52 million forward funding investment deal for its new hub by Premier Inn which is under construction in Shoreditch, East London.
The deal with an un-named UK pension fund follows three recent forward funding deals on new hotels at Kings Cross, Westminster and Farringdon.
As Whitbread expands its Premier Inn and hub by Premier Inn estate with a growth milestone target of 85,000 total UK and Ireland bedrooms by 2020 (up from approximately 70,000 today), it is pursuing selected opportunities to recycle capital and deploy investment where it can optimise returns.
Expansion in London where Whitbread is looking for 18-20,000 total bedrooms by 2020 is a key aspect of the growth strategy with further opportunities sought across the capital.
Simon Hobbs, Estates Director for Whitbread Hotels & Restaurants, said: “We’re unlocking value from freehold assets through investment deals like this latest example at Shoreditch and ensuring we maximise return on invested capital. By building excellent and well-located hotels and structuring deals around our proven Whitbread covenant, we can make our estate work hard for the benefit of our customers and our shareholders.”
Whitbread will develop the hotel over the next 24 months with hub by Premier Inn leasing the hotel from completion. The yield to the fund on completion of the development is approximately 3.9%.
This September, Whitbread opened its latest hub by Premier Inn hotel at Westminster Abbey (Tothill Street, SW1). There are now six hub by Premier Inn hotels open in London plus two in Edinburgh.
BNP Paribas Real Estate advised Whitbread. Gerald Eve represented the Pension Fund.
