Travelodge Raises Funds for 2012 Olympics Expansion
Abi BrayIt seems that Travelodge is hoping to take advantage of the 2012 Olympic games by expanding their buildings in London. Reports show that Travelodge has already raised £100 million for new hotels in the area.
The fund is being created by Twenty 10 Fund Management, which is a new investment company run by Christopher Stainforth. The aim is to build five hotels every year in UK cities, which Travelodge will occupy on leases for 25 to 35 years. Twenty 10 will raise £50 million of equity, plus £50 million of bank debt. They will also be in charge of managing the fund, which has a seven-year life.
This moves comes as Travelodge, which is owned by Dubai International Capital, aims to increase its share in the UK budget hotel market from roughly one third. Over the past eight years, it said that the UK budget hotel sector has seen growth three times greater than the overall UK hotel market.
The managing director of international and development for Travelodge, Paul Harvey, said that the fund helps the chain to capitalize on the opportunities that are presented to them without an investment partner. Mr Stainforth said that the fund offers investors the chance to share in the creation of a portfolio on institutional grade assets given to a tenant with a strong covenant and at an attractive net initial yield.
Travelodge has already been using the downturn in the economy as an opportunity to expand, and this includes raising funds to buy struggling hotels. This new deal offers a lot of possibilities for both parties that are involved.
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Filed under Business & Finance, Hotel Chains, Travel News, UK News