Premier Inn, Castlegate Business & Leisure Park, Castlegate Way, Dudley, DY1 4TA
Atlas Real Estate has recently completed the sale of a modern 63 bed Premier Inn hotel investment on behalf of Custodian REIT.
The property is located at the entrance to Castlegate Business and Leisure Park in Dudley. The park is well established with a large number of national leisure operators situated there.
The property comprises a 63 bed Premier Inn hotel built in 2013 and let to Premier Inn Hotels Ltd for a term of 25 years from 26 July 2013. The tenant has a break option on expiry of the 20th year. The lease is held on full repairing and insuring terms subject to 5 yearly upward only reviews to compounded CPI, capped at 5%. The current rent is £239,400 per annum which equates to £3,800 per room.
The purchase price of £4,453,000 reflects a net initial yield of 5.04%, assuming purchaser’s costs of 6.70%.
The purchaser was a private investor represented by Dresler Smith.
Ben Blackwall of Atlas Real Estate comments ‘The investment was highly sought after with bids received from a number of private investors and two institutions which highlights the continued demand for long secure income. The sale price was 4% ahead of the asking price and 25% above the price Custodian, advised by Atlas Real Estate, purchased the investment for in 2013.’