Travelodge launch £100m raid for struggling hotels

18th June 2009, 9:47am

Travelodge has today said it will set aside a £100 million fund, to be known as Tamesis, to buy struggling hotels including those put into administration.

In a joint venture with Meghraj the fund will seek to raise £40 million of equity, supplemented by £60 million of borrowings.

Around £20 million has already been committed by Meghraj clients and Travelodge will invest a further £500,000.

Paul Harvey, managing director of development at Travelodge, said: "Since the summer of last year we have been contacted by a substantial number of owners and administrators who have been looking to sell their hotels to us as going concerns. What stopped negotiations moving forward on many of the sites were the excessive valuations placed on the properties.

Over the last two months however it has become clear that expectations on value have moved in our direction, meaning some exciting opportunities are presenting themselves."

Malcolm King, chairman of Tamesis Capital, added: "The Tamesis Fund has been established to satisfy strong investor demand for Travelodge hotels. The advantage of this Fund is that it offers three key elements for successful property investment: an excellent tenant with a strong brand and business plan, very long leases with RPI uplifts, and an attractive net initial yield. This has all the ingredients to be a great success."

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