LXI REIT has agreed a forward purchase of a Premier Inn in Middlesbrough for £6.2m – a net initial yield of 5.1%.
LXI has paid a 10% deposit, with the balance to be paid upon practical completion.
The hotel is under construction at Wilson Street and is scheduled for completion in December. It is fully pre-let to Premier Inn Hotels on a 25-year lease and five-yearly upward-only rent reviews linked to CPI.
Funding for the acquisition came from a £55m loan from Scottish Widows that LXI agreed in July.
Simon Lee, partner of LXI REIT Advisers, said: “This Premier Inn hotel will provide the company with a long, inflation-linked income fully underpinned by the strong Whitbread PLC and Premier Inn covenants.”
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