Premier Inn Hotels in London and Oxford Sold and Leased Back by Whitbread PLC

Whitbread PLC has completed the sale-and-leaseback of two of its operational hotels. The two properties in Westminster, Central London, and Oxford City Centre have generated a net initial yield of 4.25%, bringing in £56 million for the company.

The sale and leaseback deal included a 30-year term with five yearly CPI reviews ranging from 0-4%. This arrangement is part of Whitbread’s strategy to utilize its asset-backed balance sheet to foster the future growth of the business. More than half (56%) of operational Premier Inn hotels in the UK are owned by Whitbread, a portfolio valued at between £4.9bn and £5.8bn in 2018.

As the UK’s hospitality sector progresses, Whitbread anticipates a potential 45% growth in its network. The company aims to expand from its current 86,000 UK bedrooms to a long-term goal of 125,000 rooms in the UK and Ireland. Based on its committed and future development pipeline, Whitbread is on track to offer 98,000 UK rooms by 2030. This expansion will include extensions to select established hotels and restaurants.

According to Mark Anderson, Whitbread’s Managing Director for Property and International, the company is exploring creative ways to use its large, majority-owned estate to its advantage. One such method is the sale and leaseback of a select number of trading hotels, which recycles capital back into the business.

The recently sold Premier Inn hotels are in high demand among investors seeking secure, long-term, inflation-linked income. This demand underscores the esteem in which Whitbread-operated hotels are held.

The sale and leaseback transactions were completed in September 2024, involving the 137-bedroom hub by Premier Inn London Westminster St James’s Park and the 90-bedroom Premier Inn Oxford Westgate. Both hotels are in prime locations within their respective markets. CBRE Investment Management clients purchased the hotels.