Property overview

Atlas Real Estate has recently completed the acquisition of a newly completed Travelodge Hotel and Home Bargains development on Faringdon Retail Park, Faringdon, Oxfordshire, on behalf of Aviva Investors.

The property is located on A420 Faringdon bypass to the south east of the town centre.  The development comprises the second phase of Faringdon Retail Park with the first phase having been completed in November 2017 comprising a Waitrose supermarket, Costa Coffee drive-thru and an Aldi supermarket.

The property comprises a 74 bed hotel on part ground and two upper floors and a 15,000 sq.ft retail unit at ground floor level.  Externally there is a shared 127 space car park.

The property has been let to South Somerset District Council on two new leases with co-terminus subleases to Travelodge Hotels Ltd and TJ Morris Ltd (t/a Home Bargains).

The total combined income is £508,500 per annum to South Somerset District Council.  The Council have the benefit of a £90,000 profit rent from the contracted income receivable from the subtenants, which totals £598,500 per annum.

The lease on the hotel element is for a term of 25 years from April 2021 with 5 yearly reviews to RPI collared at 1% and capped at 4% per annum compounded.  The lease on the retail element is for a term of 15 years with 5 yearly reviews to open market value capped at 2% per annum compounded.

The property was sold for £11,310,000 which reflects a net initial yield of 4.21%.  Savills represented the developer GSC Estates.