Secure Income REIT buys 55 Travelodge Hotels for £196m

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.