An Edinburgh Travelodge hotel has changed hands in a £9 million-plus property investment deal.
The five-storey hotel in the city’s Haymarket area was refurbished in 2013 and comprises 73 en-suite bedrooms, along with a restaurant and common space lobby on the ground floor. It will continue to be operated by Travelodge on a long-term lease running to 2042.
UBS Asset Management’s Real Estate & Private Markets (REPM) business said it had acquired the hotel for £9.4m, reflecting a net initial yield of about 5.25 per cent. The property was bought from a private individual on behalf of the UBS Long Income UK Property Fund.
Jonathan Hollick, head of transactions for REPM’s real estate UK team, said: “Travelodge is one of the largest brands within the UK budget hotel sector, and we look forward to a strong partnership with them as the hotel’s continued operator and occupier.
“The stable long-term, indexed cashflow offers attractive income distribution for the fund’s investors while also providing diversification benefits to the rest of their fixed income and property portfolios.
“Moreover, the performance of Edinburgh’s hotel market is second only to London in terms of occupancy and RevPAR [revenue per available room] growth, and with the Haymarket regeneration scheme set to add further value to a city already receiving above-average levels of hotel occupancy, we expect this acquisition to provide strong returns for our investors.”
The firm highlighted the hotel’s location in Edinburgh’s “prosperous” West End with “easy access to a range of transportation hubs”.
UBS added: “The hotel benefits from its proximity to the city’s multitude of leisure and culture offerings, along with tourist attractions, such as Edinburgh Castle and the Royal Mile.”