28 Oct 2016 12:09
28 October, 2016
Secure Income REIT Plc
Completion of £196 million Travelodge portfolio acquisition
The Board of Secure Income REIT Plc (the "Company"), the specialist long term income REIT, is pleased to announce that, following its announcement of 8 September 2016, it has completed the £196 million acquisition of a portfolio of 55 Travelodge Hotels.
The portfolio comprises 55 hotels with a weighted average unexpired lease term of 27 years with upwards only RPI linked rent reviews throughout the term, let to Travelodge Hotels Limited, the UK's second largest budget hotel brand.
The £196 million total cost of the portfolio includes purchase costs and reflects a yield of 7%. The consideration for the purchase has been financed by the proceeds of the placing of 46.9 million new ordinary shares in the Company at 298.6 pence per share, which raised gross proceeds of £140 million (net proceeds £137.5 million), as announced on 4 October 2016, and a new £60 million seven year non-recourse secured debt facility arranged by M&G (raising net proceeds of £58.5 million).
In addition to increasing the size and diversification of the portfolio, the acquisition provides a number of benefits to the Company and its shareholders including an anticipated 14% increase in the Company's dividend yield from a current level of 3.9%, based on 30 June 2016 EPRA NAV, to 4.5% on the Placing Price. In addition, the Company's long term contracted rental income, with fixed and RPI linked rent reviews should continue to result in increased net rent every year and hence provides attractive dividend growth prospects which the directors estimate should equate to 6.5% per annum over the next six years. Furthermore, the Company's Net LTV ratio will reduce from 59.5% to 56.0%.
For further information please contact:
Secure Income REIT Plc | +44 20 7647 7647 |
Sandy Gumm | |
Stifel Nicolaus Europe Limited (Nominated Adviser) | +44 20 7710 7600 |
David Arch | |
Tom Yeadon | |
FTI Consulting | +44 20 3727 1000 |
Richard Sunderland | |
Claire Turvey |
About Secure Income REIT
Secure Income REIT floated as a Real Estate Investment Trust on the AIM segment of the London Stock Exchange in June 2014. Upon Admission, shares were issued at 174p representing a market capitalisation of £293 million, which has subsequently grown to in excess of £710 million following the heavily over-subscribed share placing in October 2016, raising gross proceeds of £140 million to finance the acquisition of a portfolio of 55 Travelodge hotels.
The Company specialises in generating long term, inflation protected, secure income from real estate investments. Its investment strategy is designed to satisfy investors' growing requirements for high quality, safe, inflation protected income flows.
The Company is advised by Prestbury Investments LLP which was adviser to Max Property Group plc until August 2014, when Max Property Group plc was sold to Blackstone Group. Prestbury Investments LLP is a partnership of real estate and finance professionals including Nick Leslau, Mike Brown, Tim Evans, Ben Walford and Sandy Gumm.
The Company's Board is chaired by Martin Moore and also comprises three further independent Directors in Leslie Ferrar, Jonathan Lane and Ian Marcus, as well as three members of the Prestbury Team in Nick Leslau, Mike Brown and Sandy Gumm.