LXi adds to leisure holdings

Published:  25 July, 2017

Roadside scheme in Needham Market bought for £5m

LXi REIT has exchanged contracts to acquire the Travelodge hotel and Burger King and Little Chef restaurants at Needham Market service station, Ipswich, Suffolk for £5.0m, reflecting a net initial yield of 6.12 per cent.

The hotel and both restaurants are fully let to Travelodge Hotels, and the lease has an unexpired term of over 20 years (expiring in October 2037), without a break, and is subject to five yearly upward only rent reviews index-linked to the Retail Prices Index, with a high collar and cap of 3 per cent pa and 7.5 per cent pa compound. The next rent review is due in January 2020.

The property comprises a purpose-built 40- bedroom hotel, a standalone 4,045-sq ft restaurant unit and parking for 81 cars and forms part of a roadside service station which includes a separately owned Shell petrol filling station. The Property is strategically located at the busy junction of the A14 and A140, approximately seven miles north west of Ipswich in Suffolk.

LXi partner Simon Lee said: “This acquisition provides the company with additional long-term, secure and RPI-linked income with an unusually attractive rent review, offering significant rental growth in both high and low inflationary environments.”

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