The board of directors of Secure Income REIT Plc, has raised €160m (£140m) in a very heavily over-subscribed Share Placing to support its €224m (£196.2m) acquisition of 55 Travelodge Hotels. SIR provides investors with high quality income returns from real estate investments which are let to high quality companies on very long term (20yrs plus) upwards only rental leases. It is managed by Nick Leslau’s Prestbury Investments and the Placing and potential acquisition were originally announced alongside the Company’s Interim Results on 8 September.
The Travelodge portfolio has been acquired off market at a 7% initial yield, increasing SIR’s rents by an expected €15.7m (£13.7m) upon acquisition, with a Weighted Average Unexpired Lease Term of 27 years on FRI leases with upward only uncapped RPI linked rent reviews. These characteristics make it highly complementary to the existing SIR portfolio.
The acquisition will increase the dividend by 14%, from 3.9% to 4.5% yield on June EPRA NAV and the Placing price respectively, growing at a 6.5% CAGR providing a total shareholder return estimated forecast at nearly 11% over the coming years.
The Company expects to complete the acquisition on 28 October 2016.
