LondonMetric has ramped up its acquisition momentum with the purchase of a further nine Premier Inn hotels for £89m from Whitbread.

The purchase price reflects a net initial yield of 5.3% which will compound over the long lease term, it said.

Totalling 955 bedrooms, the purpose-built hotels are mostly located in South East locations including Southampton airport, Kings Langley, Milton Keynes, Poole, Colchester, Fareham, Waltham Abbey, Chipping Norton and Warwick.

The hotels are under a sale-and-leaseback arrangement and let on new 30-year leases. It generates an annual rent of £5m with five-yearly CPI-linked rent reviews.

The transaction follows LondonMetric’s acquisition in September of five Premier Inn hotels for £44.4m. They are located in Chatham, Exeter St David’s, Penzance, Southampton and Witney and total 446 bedrooms.

Andrew Jones, chief executive of LondonMetric, commented: “This transaction adds high quality and mission critical assets that generate a long, strong and growing NNN income in a sector that continues to benefit from evolving consumer preferences for travel, entertainment and experience. It follows on from our recent £44m hotel portfolio acquisition from Whitbread and increases our ownership to 22 modern Premier Inn hotels.”

Whitbread’s Premier Inn brand is now LondonMetric’s fourth largest occupier, accounting for 2.7% of the REIT’s total rent and contributing £11.3m of annual rent.

Kimmre advised LondonMetric. JLL acted on behalf of Whitbread.

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