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- LXi is funding a Travelodge development in Swindon
LXi REIT has exchanged contracts to provide forward funding for the development of a new Travelodge hotel, drive-through Starbucks coffee shop and drive-through Subway restaurant in Swindon, Wiltshire. The cost to LXi is GBP8.28 million, reflecting a net initial yield of 5.8% on the net cost. When complete (target June 2018) the new development will comprise:
They say that the property is well located on Great Western Way, one of the main arterial routes into central Swindon, approximately one mile to the west of the town centre. Swindon is a large town in Wiltshire, South West England, midway between Bristol and Reading. it is adjacent to the M4 motorway with good rail connectivity to London and a broad range of significant employers, including major manufacturing plants for Honda and BMW/Mini, as well as head office functions for Npower, Nationwide Building Society and Intel’s main site in the UK. Other local occupiers include John Lewis At Home, Next Home, B&Q and Lidl.
The Travelodge and Starbucks pre-lets have exchanged and LXi is acquiring the land and forward funding on a fixed-price basis (no development risk for LXi). Completion of the purchase is subject to receipt of planning consent (expected in early July) and exchange of the Subway agreement for lease (which is in advanced legals). The developer will pay LXi a licence fee during the construction period.
Simon Lee, Partner of LXi REIT Advisors Limited, commented: “We are pleased to provide the forward funding for this attractive, long-let and index-linked hotel and leisure development asset, which benefits from a strong location and residual value. The company has now deployed 65% of its net equity across eight assets at a blended net initial yield of 5.7% and with a long weighted average unexpired lease term to first break of 23 years, since Admission on 27 February 2017. We are also in solicitors’ hands or under offer on a number of additional transactions, across a wide variety of different sectors, which will fully absorb the balance of the company’s net equity.”
LXI : LXi is funding a Travelodge development in Swindon
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