Travelodge Raises £100m for 2012 Olympics Expansion
Travelodge is stepping up its expansion in the build up to the 2012 London Olympics by raising £100m for new hotels.
The fund is being created by Twenty10 Fund Management, a new investment vehicle run by Christopher Stainforth. It aims is to build five hotels every year in UK cities, which Travelodge will occupy on leases of 25 to 35 years.
Twenty10 will raise £50m of equity, plus £50m of bank debt. Twenty10 will manage the fund, which has a seven-year life.
The move 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. In the past eight years, it said that the UK budget hotel sector had seen growth three times greater than the overall UK hotel market.
Paul Harvey, Managing Director of International and Development, Travelodge, said that the fund help the chain “to capitalise on opportunities that are presented to us without an investment partner.”
Mr Stainforth is quoted in the Financial Times saying: “The fund offers investors the chance to share in the creation of a portfolio of institutional-grade assets let to a tenant with a strong covenant and at an attractive net initial yield.”
Travelodge has been using the downturn as opportunity expand, including raising funds to buy struggling hotels.
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