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LXi REIT PLC on Wednesday said it agreed with Travelodge Hotels Ltd on a ‘material and accretive’ changes to the leases on 122 hotels.
The London-based commercial real estate-focused investment trust said it agreed to caps and collars of 4% and 1% respectively per year on previously uncapped and uncollared rent reviews for Travelodge. The reviews will be the UK consumer price index plus 0.5 percentage point, switched from the retail price index, which is being phased out.
In return, LXi secured an average nine-year extension on unexpired lease terms, which LXI said will have a material positive impact on asset values.
The invested noted that no rent-free periods have been granted and that no rent reductions have been made. It added that Travelodge is trading ‘robustly’, with 2022 on track to be the most profitable year on record.
‘Travelodge, like Premier Inn, tends to outperform during recessionary periods as both business and leisure customers are attracted to the low cost and value offered by the budget hotel brands,’ LXI explained.
LXi REIT shares were 0.3% higher at 117.00 pence each on Wednesday morning in London.
By Tom Budszus, Alliance News reporter
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