Redefine International PLC today announced the purchase of a purpose built Travelodge hotel at Lumina Park in Enfield, London, for £10 million, representing a net initial yield of 5.5%.
Redefine International is an income focussed UK Real Estate Investment Trust which has a primary listing on the London Stock Exchange and a secondary listing on the Johannesburg Stock Exchange (JSE).
The Enfield Travelodge, constructed in 2012, is a 39,000 sq ft hotel and is let on a 33-year lease. It is a 132 bedroom hotel across four floors along with a ground floor reception area, cafeteria and bar. The building also includes a separate retail unit at ground floor level, which is currently vacant. Once let, the property’s net initial yield is expected to rise to approximately 6.4%. The hotel is close to both Enfield Town and Southbury rail stations, which offer easy access to London Liverpool Street, and Southgate underground station on the Piccadilly Line.
Mike Watters, Redefine International CEO comments: “The acquisition provides a good opportunity to acquire long dated uncapped RPI income from a good quality covenant, in a sector we like and know extremely well. We are now beginning talks with a number of convenience supermarket operators to let the vacant retail unit, which will further improve the asset’s yield profile.”
London’s Lumina Park is a newly developed 100,000 sq ft mixed-use retail and industrial scheme located on the A10, within a short distance of the North Circular and Junction 25 of the M25 in Enfield. Jemca Toyota Motors, Big Yellow and Halfords Autocentre are among the existing businesses based in Lumina Park. Additional plots of land are available for phases of development at the park on a design and build basis.
The Enfield Travelodge acquisition adds to Redefine International’s geographically diverse investment portfolio, which is independently valued at more than £1 billion. This is comprised of real estate assets in the retail, office, industrial and hotel sectors across the UK, Europe – specifically Switzerland, Germany, the Netherlands and the Channel Islands – and Australia.
For South African investors it represents a Rand hedge in a stable, sustainable income fund with exposure to real estate in first world markets.