20th Aug 2014 – The Times
The sale includes 11 hotels in London and 23 on motorways
A property package of 144 Travelodge hotels has been sold to a consortium of investors including Goldman Sachs for an estimated £500 million. The hotels, including 11 in London and 23 on motorways, were put up for sale through CBRE by Nick Leslau’s Prestbury Investment Holdings, Tom Hunter’s West Coast Capital, the Reuben Brothers’ Aldersgate Investments and Lloyds Bank.
The portfolio also included 63 pubs leased to Spirit Pub Company and Orchid Group, now part of Mitchells & Butlers, although these have been sold separately for almost £200 million to Cerberus Capital Management, the US private equity firm that owns Admiral Taverns.
The sale of the Travelodges to Goldman Sachs, Avenue Capital and GoldenTree Asset Management, each taking 33 per cent, puts the 144 budget hotels under the same ownership as the Travelodge chain itself. In 2012, the three US firms grabbed the keys to the company as part of a painful debt restructuring. Although they will remain separately held, with Travelodge paying an RPI-linked rent to lease them, analysts said that, when the Goldman consortium came to sell the Travelodge chain, which runs a total of more than 500 hotels, it could opt to include the 144 property assets.
Peter Gowers, chief executive of Travelodge, said the level of interest in the Travelodge assets, which are also thought to have elicited offers from Colony Capital and Starwood Capital, mirrored “the strong interest we see from real estate institutions in developing and owning Travelodge hotels”. He said the company was “well on the way” to being rebuilt following the debt restructuring and accompanying company voluntary arrangement, adding: “In the past 18 months we have invested £57 million in modernising our hotels, helping us attract more business customers and outperform the market.”
Cerberus has been a prolific buyer of pubs since it paid about £200 million for the 1,000-pub Admiral estate early last year. It has acquired 102 Spirit pubs for £170 million and 32 Punch Taverns houses for £33 million, both from the same Prestbury-led vendor consortium.