Standard Life Assurance has bought a Premier Inn in Birmingham city centre for £26.6m.
The 152-bedroom hotel at 6 Waterloo Street was bought from a syndicate of private investors and is let to the hotel operator until 2037.
Mark Johnson, a director at MK2, said the deal had set a new benchmark for regional hotel yields: “The price reflects a net initial yield of 4.12%. By agreeing a 20-year lease extension with Premier Inn on sale we were able to achieve maximum value for the asset and our client.”
Formerly an office block, the building was bought eight years ago and converted into a hotel by Cannock Developments on behalf of the Downing Investors.
BNP Paribas Real Estate advised Standard Life; MK2 Real Estate advised the vendors.
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