LXi REIT has put green clauses into the leases of the 122 Travelodge hotels it acquired as part of its merger with Secure Income REIT.
The company has regeared the leases across the 122 sites, inserting rent review caps and collars at 4% and 1% per annum and extending the unexpired lease terms by a weighted average of nine years. No rent-free periods have been granted and no rent reductions made.
The REIT said it had also agreed green lease provisions around the sharing of energy, water, recycling and waste data; co-operating on the environmental, social and governance strategies of the landlord and tenant; and ensuring the landlord has the necessary rights to enter the properties to make environmental performance improvements.
“These measures are designed to enhance the company’s own ESG reporting as well as the energy performance of the hotels and further enhance their investment attraction,” LXi said.
Simon Lee, fund manager at LXi REIT Advisors, said: “Our expanded portfolio has defensive characteristics and further potential for value accretive asset management opportunities which we are also actively exploring. This will be supported by our proactive accretive recycling of capital and wide range of refinancing options to enable us to continue to underwrite our progressive dividend policy and deliver outperformance for our shareholders.”
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