Lothbury Investment Management, acting on behalf of Lothbury Property Trust, has completed the acquisition of the Travelodge Hotel, Cameron Toll in Edinburgh for c.€16m (£13.7m). The 115-bed freehold property was purchased from an Edinburgh-based private investor. The hotel benefits from an unexpired lease of 27 years, linked to RPI reviews and will represent a yield in the region of 4.5% following the next rent review in April 2020. The current rent is €661,950 (£568,817) per annum, reflecting €6,517 (£5,600) per room per annum.
The hotel is arranged over four floors and is located at Cameron Toll, approximately two miles south of Edinburgh city centre, on one of the city’s main arterial routes. The building was comprehensively redeveloped and extended in 2010.
Outside London, Edinburgh is the leading hotel market in the UK, underpinned by significant year-round leisure and corporate demand.
Mike Toft, Senior Fund Manager and Executive Director of Lothbury Investment Management, said: “This investment represents excellent long-term income for the fund with a lease running until 2045, which has the benefit of an RPI linked rental uplift within less than two years. The purchase falls in line with our strategy of increasing our allocation in the alternative sector, it also increases the average weighted lease term of the fund.”