6th September 2023, London - BNP Paribas Real Estate has successfully represented RO Real Estate in the freehold sale of the Travelodge Hotel at Taunton to The UUPIF, The Oddfellows' unitised property investment fund, for £3.9m.
The net initial yield achieved reflects 6.375% with the income secured for nearly 35 years to Travelodge Hotels Limited off an affordable rent of £4,140 per key, the lease being subject to five-yearly reviews to RPI, the next being in 2027.
Richard Talbot-Williams, head of UK hotels at BNP Paribas Real Estate commented: “Our marketing campaign generated considerable private investor interest. Although the interest rate backdrop has changed considerably since the beginning of the year, this transaction demonstrates the continued attraction to investors of well located, future proofed, sensibly rented, long let index linked hotel assets. After a slow first half we anticipate an uptick in hotel investment activity during the remainder of 2023 with an increase in committed sellers and continuing robust buyer demand.”
Edward Rowlandson, group managing director at RO Group commented: “We have had tremendous success with our Travelodge asset in the town, which lies only around 40 miles from both Bristol and Exeter airports, and are delighted to pass the baton to the new owners. We believe that they will enjoy continued favourable returns from the property, which will continue to benefit in the long term from the nearby development of Hinkley Point, one of the UK’s major infrastructure investment commitments.
“We will use the proceeds of sale in the normal course of our business: to identify, purchase, develop and maintain property assets across the southern half of the country for both our continued success and to the benefit of local economies. Reinvestment into and the upgrading of assets by the private sector is an important tenet of the national economy, particularly with sustainability being such an important focus, and one that we will continue to pursue.”
Nick Cashmore, investment director at RO Group added: “We are very pleased to have successfully concluded our business plan and completed the sale in a quick timeframe. We are actively seeking new development opportunities to reinvest the proceeds of this and other recent sales from the portfolio.”
Travelodge Taunton is a purpose built, all electric EPC B rated, future proofed 64 bedroom hotel with a larger than typical room size and a recently upgraded Energy Performance Regulation rating of EPC B. The hotel is set amidst extensive retail, leisure and office uses. Other businesses in the immediate vicinity of the hotel include Brooks Macdonald, B&Q, Hollywood Bowl, McDonald’s, KFC, Halfords, Sainsbury’s and the Hankridge Arms.
It is a significant contributor to and player within the commercial fabric of Taunton, a thriving county town and a major commercial centre. Guest numbers at the hotel are however not only driven by local business but also by increasing leisure demand around Taunton itself, and by West County bound travellers.
RO were advised by BNP Real Estate and WBD. Christopher Dee LLP represented the Oddfellows.
