Cleethorpes' Premier Inn hits the investment market - for well over £35 a room!
Cleethorpes' Premier Inn. Picture: Kathrine Clarke.
By Grimsby Telegraph | Posted: 5 Feb 2019
Cleethorpes’ Premier Inn and neighbouring Brewer’s Fayre restaurant has hit the investment market at a cool £7.3 million.
The 84-room Meridian Point hotel, together with the standalone 192-cover eatery, are being offered, with details revealing how they command an annual rent of £349,000.
Brought forward by Wootton-based developer Maltgrade and designed by Grimsby’s CDC Architecture, it was bought when completed by Riverside Capital, a London asset management firm.
The two-acre development has 15 years to run until a break in the index-linked lease, with 21 years until it expires.
The initial build, back in late 2014.
Capital-based property consultancy Levy is acting for Riverside, and describes the development as one that “benefits from excellent public realm,” referring to the neighbouring golf club and boating lake, as well as the resort’s beach “within 200 metres of the property”.
Jeremy Grundy, partner, said: “It has a strong covenant in Whitbred which institutional investors tend to like, with a lengthy income, and the benefit of this is it is RPI linked, and doesn’t have to rely on other deals. It rides over any of the turbulence we are seeing across other commercial activity in the moment.”
The hotel was initially built with 60 rooms in 2014, with a further 24 added two years later.
It is held on a 198 year long leasehold, with 187 years left to run, from freehold owner North East Lincolnshire Council on a peppercorn rent.
Should it achieve the asking price, it would command an initial yield of 4.88 per cent.
Grimsby-based chartered surveyor Lawrence Brown, managing partner of Scotts, said: “This is the sort of investment that is sought after by pension funds and investment companies across the UK. We are also seeing significant investment in the UK by foreign funds. The fact that this hotel is in Cleethorpes with its growing tourist economy is likely to give these investors an element of comfort regarding the security of their long term income.”