Birmingham Premier Inn Freehold Sale Sets Regional Record
Sale achieves 4.12 % record regional yield
The Premier Inn in Birmingham city centre has changed hands in a £26.55m deal.
Standard Life Assurance has acquired the 152-bed budget hotel from a syndicate of private investors represented by Downing LLP.
Niche property consultancy MK2 Real Estate advised the vendors.
Mark Johnson, a director of MK2, said the deal has set a new benchmark for regional hotel yields:
“The price reflects a net initial yield of 4.12 per cent. By agreeing a 20-year lease extension with Premier Inn on sale we were able to achieve maximum value for the asset and our client.
“The sale attracted lots of interest with a number of institutional investors competing to secure the deal and bidding significantly ahead of the asking price. This demonstrates confidence in Birmingham and the booming hotel sector.”
Premier Inn is on 1-6 Waterloo Street, in the heart of the city’s business district. It is let to Premier Inns Hotels Ltd – with a guarantee from parent Whitbread plc – until 2037. The 152-bedrooms are over seven floors, with a ground floor reception and the recently refurbished 80-seat Beefeater Block bar/restaurant.
Formerly a tired office building, the premises was acquired eight years ago and converted into a hotel by Cannock Developments, on behalf of the Downing investors.
BNP Paribas advised Standard Life on the acquisition.