Whitbread Sells 389-Room hub by Premier Inn Hotel in Kings Cross, London

Whitbread has exchanged agreements with Legal and General for the sale and leaseback of its 389-room hub by Premier Inn hotel in Kings Cross, due to open in 2017, in exchange for a 25 year lease agreement.

Legal and General will pay £84.5 million in cash for the property, with an initial payment of £46.5 million on exchange. Further staged payments will be made during the construction period with a final balancing payment being made on completion of the hotel in June 2017.

The total sale price of £84.5 million produces a net initial yield of just under 4% against an annual rent of £3.5 million.

Nicholas Cadbury, Group Finance Director of Whitbread, said, “This transaction shows the strength of Whitbread's covenant and the strong asset backing to our balance sheet as well as our ability to recycle the value we create from our freehold developments into new opportunities.”

In April, Whitbread unveiled plans to carry out sale and leaseback transactions this year with proceeds amounting to between  £100 and £150 million.

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