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Travelodge announce plans to launch 100m fund for hotel buys

Posted by Brian | Filed under hotels

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Budget hotel chain Travelodge have unveiled plans to launch a £100million property fund which it will use to acquire smaller hotels struggling in the current economic climate.

In a joint venture, Travelodge will partner with Anglo-Indian property fund manager, Meghraj to source and acquire between eight and fourteen hotels which will be leased under the Travelodge banner.

The new partnership – called Tamesis Capital – will, according to a Times report seek to raise £40million of equity and £60million of debt which it will use to acquire and convert hotels and lwill be eased by Travelodge.

Megrhraj is already an investor in 15 Travelodge hotels and aims to raise half of the projected equity figure from its high-net-worth clients, while it hopes institutions will fund the remainder.

In a statement, Paul Harvey, Travelodge’s managing director of development revealed that many hotel owners and administrators had contacted the budget hotel chain looking to sell their premises but wildly fluctuating valuations had scuppered any chance of business being done.

However, with more and more small hotel owners looking to cut losses while others end up on admistrators’ books, the expectations on values for such properties have become more attractive to Travelodge; enough for them to consider taking some on and further expanding their reach towards cost-conscious travellers.

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Tags: travelodge