Land Securities Trillium has agreed heads of terms to buy a portfolio of hotels from Accor for £439m as part of a sale and leaseback
The portfolio comprises 30 hotels, which represents around a third of the hotels owned or operated by Accor in the UK. The hotels operate under the IBIS two-star and Novotel three-star brands and most are in London or other city centre locations across the UK.
Rental income for each hotel is based on an agreed percentage of the hotel’s annual turnover. Last year’s annual gross rent was more than £27m.
Accor, which is the fourth-largest hotel operator in the world, has agreed to lease each hotel on an 84-year lease with a 12-year rolling break. It will be responsible for the maintenance of the buildings.
LandSecs Trillium has, however, agreed to contribute around £35 of capital over four years towards property improvement works.
The portfolio will be included in the REIT qualifying portfolio.
Ian Ellis, chief executive at LandSecs Trillium, said: ‘This represents the first step in the development of a long-term relationship with Accor as its UK property partner, helping them to achieve their core objective of expanding their share of the UK hotels market.'
NM Rothschild & Sons advised Accor.