The real estate arm of UBS Asset Management has acquired the Edinburgh Travelodge Hotel as it aims to further diversify its long income UK property fund.
Bought from a private individual for £9.4 million (€10.3 million), the property will continue to be operated by Travelodge Hotels Limited on a long-term lease basis until 2042.
The investment reflects a net initial yield of around 5.25%, according to the Swiss firm. The acquisition diversifies the tenant mix within the UK property fund, it said.
Located in Edinburgh’s West End, the five-storey hotel comprises 73 en-suite bedrooms, as well as a restaurant and the standard common lobby space on the ground floor.
According to the firm’s head of real estate and private markets (REPM), Jonathan Hollick, the property will offer a stable, long-term indexed cash flow.
“The performance of the Edinburgh hotel sector is second only to London,” he said.
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