Whitbread enters sale-and-leaseback with Legal & General

(ShareCast News) - Hospitality group Whitbread announced on Thursday that it has exchanged agreements with Legal & General for the sale-and-leaseback of its 389-room 'Hub by Premier Inn' hotel in Kings Cross, due to open in 2017, in exchange for a 25 year lease agreement.The FTSE 100 company announced plans in April to carry out sale and leaseback transactions during this year, with proceeds of £100m to £150m.Legal & General will pay £84.5m in cash for the property, with an initial payment of £46.5m due on exchange and further staged payments made during the construction of the property, with completion due in June 2017."This transaction shows the strength of Whitbread's covenant and the strong asset backing to our balance sheet as well as our ability to recycle the value we create from our freehold developments into new opportunities," said Whitbread group finance director Nicholas Cadbury.The total sale price of £84.5m produces a net initial yield of just under 4% against an annual rent of £3.5m.