(Alliance News) - Whitbread PLC on Wednesday said it has bought a freehold property on the Strand in central London, located just off Trafalgar Square.
The Bedfordshire-based hospitality company said that the 5 Strand property will become the latest hub in the Premier Inn hotel estate.
"Hub by Premier Inn is designed for locations in major cities where property prices are relatively high but, thanks to its smaller room format, is still able to generate attractive long-term returns whilst providing affordable rooms for guests," Whitbread explained.
The company expects to invest over GBP200 million into the property, including construction and related costs. This reflects its commitment to invest in its presence in the London market, where a "significant" portion of Premier Inn's pipeline is located, Whitbread said.
Further, the company said the acquisition underlines its confidence in the hub by Premier Inn brand, which was first introduced back in 2014.
The brand now has 2,431 open rooms, which performed strongly in financial year 2022, it added.
Whitbread noted that the property will be funded from its existing cash resources, as well as one its Bar+Block steakhouse restaurants. It expects the hotel to open during 2027.
Chief Executive Officer Alison Brittain said: "It is in a prime position and is perfect for the hub brand which is continuing to perform well. The purchase reinforces our confidence in the long term potential of the London market, the hub by Premier Inn brand and the growth prospects of our UK business."
Shares in Whitbread were down 1.4% to 2,499 pence each in London on Wednesday morning.
By Sophie Rose; sophierose@alliancenews.com
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Whitbread (WTB)