Whitbread has exchanged agreements with Legal
and General for the sale and leaseback of its 389-room hub by
Premier Inn hotel in Kings Cross, due to open in 2017, in exchange
for a 25 year lease agreement.
Legal and General will pay £84.5 million in cash
for the property, with an initial payment of £46.5 million on
exchange. Further staged payments will be made during the
construction period with a final balancing payment being made on
completion of the hotel in June 2017.
The total sale price
of £84.5 million produces a net initial yield of just under 4%
against an annual rent of £3.5 million.
Group Finance Director of Whitbread, said, “This
transaction shows the strength of Whitbread's covenant and the
strong asset backing to our balance sheet as well as our ability
to recycle the value we create from our freehold developments into
In April, Whitbread unveiled plans to carry out
sale and leaseback transactions this year with proceeds amounting
to between £100 and £150 million.
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