Whitbread, owner of Premier Inn and Costa Coffee, says it is on track to deliver 85,000 rooms at Premier Inn by 2020, with only 2,000 rooms left to develop.
The group plans to maintain its balance of freehold and leasehold properties, and keep the Premier Inn and restaurant estate as a majority freehold.
More than 60% of Premier Inn’s properties are freehold, which the company said provides a competitive advantage. The market value of its freehold properties is between £4.2bn and £5.1bn, according to Whitbread.
The company is driving a programme of active asset management that will involve building extensions and recycling capital through sale and leaseback transactions and re-investing the proceeds into freehold acquisitions.
It said it would consider between £50m and £150m of sale and leaseback transactions in the coming year.
Whitbread intends to maintain its balance between freehold and leasehold properties. The estate is currently 63% freehold, and the 45% freehold proportion of the development pipeline will bring this down slightly to 60%.
Mark Anderson, Whitbread’s managing director of commercial property, said: “In line with regular reviews of the estate, Whitbread will typically consider a hotel to be trading to its full potential after three years (ie at maturity) and will look at further opportunities to add value to the site, typically through an extension, which can increase sales in a cost-effective and low-risk way. Some 200 of our hotels have been extended over the past five years.”
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