Secure Income REIT buys 55 Travelodge Hotels for £196m

AIM-listed Secure Income Real Estate Investment Trust has completed the £196m acquisition of a portfolio of 55 Travelodge Hotels.

The 55 hotels have an average unexpired lease term of 27 years with upwards only retail price index linked rent reviews, which are let to Travelodge Hotels, a budget hotel brand.

The £196m includes costs and reflects a yield of 7% financed by a £140m placing of 46.9m shares at 298.6p and a £60m seven-year debt facility arranged by M&G.

The acquisition diversifies and increases the size of the company’s portfolio and is also expected to raise its dividend yield by from 3.9%, to 4.5% on the placing price.

Net rent every year should increase which will also provide dividend growth of 6.5% per year over the next six years, while the company's net loan-to-value ratio will fall to 56% from 59.5%.

Shares in Secure Income REIT were down 0.32% to 312p at 1341 BST.